Bitcoin recovered to $63,000 on Monday, June 8, pushing $540 million in short positions into liquidation over seven weeks. The market rebounded from levels below $60,000 where prices had sat on Friday. A technical signal not seen since 2022 has also appeared on the weekly chart.
Bounce From $60K: $540M in Shorts Liquidated Over Seven Weeks
Friday, June 6, ended badly for the market. A strong US jobs report pushed Bitcoin below $60,000 for the first time in eight months, and open short positions across the market exceeded $2.6 billion. Most analysts expected further selling.
The weekend told a different story. Bitcoin gradually recovered and topped $63,000 on Monday morning. According to Decrypt, this triggered $540 million in crypto short liquidations - a seven-week high for that metric. Traders who bet on continued declines took significant losses.
For context: five weeks ago Bitcoin was trading above $78,000. The bounce from $60,000 to $63,000 looks modest by that measure. But the nature of the move and the technical signals that appeared with it have caused some analysts to revise their short-term outlook.
Bullish Divergence: First Time Since 2022
According to CoinTelegraph, a bullish RSI divergence has formed on the Bitcoin weekly chart. This is only the second such signal in BTC's entire trading history. The first appeared in 2022 and preceded a 755% rally over the following two years.
A bullish RSI divergence forms when price makes lower lows while the relative strength index fails to make new lows. This points to weakening selling pressure. The fact that this signal appeared on the weekly rather than the daily timeframe gives it more weight in technical analysis circles.
Some analysts cite $92,630 as the nearest technical target if the recovery is confirmed. That said, there is nearly a 47% gap between current $63,000 levels and that target, and cautious voices point out that one weekly signal does not guarantee a new trend.
Why Analysts Are Still Cautious
Despite the technical signal, several analysts are holding back on bullish calls. The bounce happened on relatively low trading volume. In addition, Bitcoin volatility on CME (where institutional traders are most active) remains elevated. Decrypt cites this as one of the main caution flags alongside the ETF data.
The second argument against a quick recovery is ETF behavior. Bitcoin ETF outflows have continued for a fourth straight week. According to CoinTelegraph, BlackRock IBIT led redemptions, alongside Fidelity and Grayscale funds. Total outflows for the week reached $1.7 billion.
These sustained outflows suggest that large institutional players are not rushing to rebuild positions. Without fresh inflows into ETFs, sustaining a price recovery is difficult.
ETF Outflows for 4 Weeks: Who Is Selling and Why
Four consecutive weeks of net outflows from Bitcoin ETFs reflect a broader market mood. Large players appear to be reducing risk exposure amid uncertainty over the Fed's rate path and US labor market data.
- BlackRock IBIT recorded the largest outflows of any Bitcoin ETF during the reporting week.
- Fidelity FBTC and Grayscale GBTC also posted net redemptions.
- The weekly outflow total reached $1.7 billion, pushing the four-week cumulative figure above $5 billion.
- At the same time, Strategy added to its position - the company bought 1,550 BTC for $101.3 million on the same Monday.
The gap between ETF outflows and Strategy's buying shows the market is divided. Some large players are cutting exposure while others are adding at lower prices.
What to Watch for Bitcoin This Week
The key support level is $60,000. If BTC holds this mark and avoids retesting levels below it, the technical picture stays constructive. A break above $65,000 on strong volume would help confirm a shift toward recovery.
For those considering a Bitcoin to dollar exchange in the $62,000-$65,000 range, the current zone sits between key support and resistance. Short sellers are covering positions, buyers are cautiously stepping in. The market has not made up its mind yet.
Next week brings a Fed meeting and CPI inflation data. These events typically create higher volatility across crypto markets. If the macro figures come in neutral or positive, the weekly bullish divergence signal will gain further backing.
Comments
Your email address will not be published. Required fields are marked *