Bitcoin Bounces Off The Bottom That Hasn't Bottomed Yet

Bitcoin hovered below $60,000 to start the week, trading near $59,800 as of 13:00 UTC on Monday, up 0.6% since midnight but still down more than 50% from its October record high of $126,080. The rebound from a Thursday low of $58,100 — bitcoin's weakest print since September 2024 — was accompanied by over $1.1 billion in leveraged crypto liquidations over the prior 24 hours, according to CoinGlass, with longs accounting for roughly $875 million of the total. Ether (ETH) failed to track the bounce and remained near $1,550, while most major altcoins traded sideways; aave (AAVE) added as much as 6.8% overnight on reports that Kraken was exploring a 15% stake in the DeFi protocol, and solana (SOL) climbed 2% to extend a 13% rebound since Thursday.

Derivatives positioning signaled elevated stress beneath the surface. Bitcoin futures open interest (OI) fell back to early-June ranges near 750,000 BTC after briefly spiking to 778,000 BTC during Thursday's selloff — a jump consistent with traders adding shorts into the dip. Ether futures OI held flat around 14.2 million ETH since June 15, suggesting limited fresh shorting, while solana OI at 72.70 million SOL sat just below its June 24 record high of over 76 million, leaving the token exposed to further volatility. The bitcoin implied volatility index BVIV dipped to 47%, pausing a two-week climb, though most top-25 tokens continued to show bearish dominance across the OI-adjusted 24-hour cumulative volume delta. Over $200 million in futures positions were liquidated in the past 24 hours, although in the four hours preceding the report roughly $20 million in shorts had been forced out as bitcoin bounced back through $60,000.

Demand has yet to absorb the supply hitting the market. CryptoQuant data showed roughly 50,000 BTC was sent to exchanges at a loss over the prior 24 hours, while the short-term holder market cap fell to $237.7 billion — its lowest since October 2024 — and the Fear & Greed Index slipped back into "extreme fear." Spot bitcoin ETFs in the U.S. bled $691 million on Thursday, the largest single-day outflow since May 27, per Farside Investors, and CryptoQuant head of research Julio Moreno told Milk Road that annual growth in ETF holdings has slumped to "basically zero" for the first time since the funds launched in 2024, with ETFs now "adding to Bitcoin's supply rather than soaking it up." Spot bitcoin ETFs posted net outflows of 71,600 BTC over the past month, while Digital Asset Treasuries added just 7,500 BTC, leaving combined flows 77,000 BTC in the red after new issuance, according to the analysis.

The macro backdrop kept pressure on prices. Bitcoin has weakened since new Federal Reserve Chair Kevin Warsh's hawkish debut, and on the prediction market Myriad — owned by Decrypt parent company Dastan — traders placed a 77% probability on bitcoin's next move taking it to $55,000, up from 72% at the start of the week. Galaxy Digital CEO Mike Novogratz said during a Thursday AMA that bitcoin's bull case "revolves on two things," the passage of the Clarity Act and a Fed rate cut, adding that "When we see the war end and oil prices go back to $60 then you'll start to see this idea of, maybe that opens the door for a late fourth quarter rate cut, or even early first quarter rate cut the next year." Tokenization platform tx co-founder Mike McCluskey called $60,000 "the definitive line in the sand," noting heavy put positioning at that strike and warning that a breach would "likely accelerate the downside in this thin liquidity environment."

The analyst note also flagged miner stress as a potential bottoming signal, with bitcoin's production cost now near $78,000 and on-chain data pointing to facilities going offline — a pattern historically associated with late-stage bearish capitulation. Bitcoin's average production cost climbed to roughly $78k, well above the spot price near $60k. Exchange BTC balances have risen by a net 85,000 BTC since the start of 2026 to reach 3.5 million BTC, a sign that buyers have not yet absorbed the latest wave of selling. In short, capitulation signals are stacking up across weak sentiment, miner strain and short-term holder losses, but until exchange balances begin trending lower, a true supply shock — and a confirmed bottom — remains unlikely.