According to TechFlow, the latest report from Bitfinex Alpha shows that on July 3, the price of Bitcoin fell below the 120-day range to $53,219. Market concerns about the German government and Mt. Gox creditors selling led to the decline. However, market data over the weekend showed that a potential local bottom has been formed:
1. Although the German government has transferred a large amount of BTC to exchanges, this amount is relatively small relative to all Bitcoin bought and sold since 2023. 2. Volatility indicators show that the gap between implied volatility and historical volatility has narrowed, and the market expects a more stable future, which means that BTC may fluctuate at current levels or at least not experience a sharp drop. 3. The market's short positions show complacency, and the high number of short liquidations indicates that there are a large number of "late shorts" when the market rebounds, lacking a clear direction.
Selling pressure from short-term holders may be close to exhaustion, with the Spent Output Profit Rate (SOPR) for short-term holders at 0.97, indicating that this group is now selling at a loss. Historically, when this happens, prices rebound when selling pressure eases.
Additionally, the funding rate for BTC perpetual contracts turned negative for the first time since May 1, which could indicate increased bearish sentiment but also reinforces the view that BTC may be stabilizing or near a bottom. Negative funding rates combined with low short-term SOPR values typically mark the bottom of a price correction.
On the macroeconomic front, the Fed minutes showed that officials remain highly cautious about cutting interest rates, despite labor market data and easing inflation supporting loose monetary policy. The unemployment rate is currently 4.1%, the highest level since November 2021, indicating that the economy is adjusting to long-term growth and hiring trends. No rate cut is expected at the July 30-31 policy meeting, but a rate cut is hoped for in September.