Bitcoin Bounces, Shorts Get Squeezed, and LTHs Still Refuse to Panic 🚀

Bitcoin [$BTC] pushed against the $63,000 resistance on Friday, 3 July, but failed to break through, extending a recovery that began from $58,500 at the start of the month. According to AMBCrypto, the move caught overleveraged short sellers off-guard, with $143 million in $BTC short liquidations recorded so far in July. Heavy spot ETF outflows in prior sessions suggested weak hands had largely exited the market, framing the latest uptick as a potential bullish reversal rather than a pure short squeeze.

The 4-hour chart showed a bearish price structure at press time, though Fibonacci retracement levels pointed to a possible bounce toward $65,200. On the Cost Basis Distribution chart, the $64,000 and $67,000 zones stood out as clusters where a sizeable amount of $BTC had been acquired, with further supply concentrated at $72,300 and $77,200. A deeper rebound would likely give underwater holders at those levels an opportunity to exit at breakeven, and the resulting selling could weigh on short-term upside momentum.

Long-term holder metrics told a more patient story. The long-term holder MVRV, which compares current price to the aggregate cost basis of holders who have held $BTC for 155 days or more, sat at 1.26 at the time of writing. In every prior Bitcoin cycle, deep corrections and long-term holder despair have pushed this metric below 1, a threshold it has yet to cross in 2026.

A CryptoQuant Insights post from XWIN Japan highlighted a sharp rise in $BTC inflows to exchanges toward the end of June, a pattern mirrored across Ethereum [$ETH] and the broader altcoin sector. Such cross-asset inflows signal capital movement throughout the entire crypto sector rather than activity concentrated in a few names. Persistently negative ETF flows, falling apparent demand, and a negative Coinbase Premium Index pointed to limited buying pressure, leaving market participants watching liquidity conditions for signs of an imminent decisive move.