Bitcoin, Ether extend relief rallies as extreme fear meets renewed ETF buying

Bitcoin (BTC) rallied, $50 abbreviated of $63,000, connected July 3, and Ether (ETH) outperformed the wider market, pushing to $1,775. The end-of-week rally comes a fewer days aft BTC fell to a 21-month debased and ETH sank to caller year-to-date lows. Highlighting the antagonistic sentiment, the Crypto Fear & Greed scale registered “Extreme Fear” astatine 11 retired of 100. 

Crypto Fear & Greed Index. Source: Alternative.me

That spread betwixt the “Extreme Fear” speechmaking and Friday’s bullish marketplace enactment is worthy noting. On July 2, US spot Bitcoin exchange-traded funds (ETFs) took successful a nett $221.7 million, their largest single-day inflow since aboriginal May and a interruption from 10 consecutive days of outflows. 

Spot Bitcoin ETF netflows. Source: SoSoValue.com

Futures markets substance Bitcoin and Ether gains

The leverage broadside of the crypto marketplace looks much one-sided than the spot buying information unsocial would suggest. “Funding,” the periodic outgo traders holding bets connected higher prices marque to traders betting connected little prices erstwhile the marketplace leans bullish, has stayed affirmative for the past 8 days and has been climbing passim this period. 

Bitcoin unfastened interest, backing rate. Source: Hyblock

The full magnitude of outstanding leveraged Bitcoin positions is besides adjacent its highest level successful the past respective days, adjacent though the terms has mostly moved sideways. Leverage gathering up without terms making overmuch advancement is mostly viewed arsenic a caution motion alternatively than confirmation that a rally is underway. 

Related: Bitcoin holds $61K aft US jobs information report, AI assemblage weakness: Did BTC bottom?

Can bulls support their pace? 

Looking astatine the adjacent fewer trading sessions, a fewer notation points basal out. On the cautious side, whether Bitcoin holds supra astir $61,000, wherever a ample clump of leveraged bargain positions sits, matters, and truthful does whether Wednesday’s ETF inflow turns retired to beryllium a one-day lawsuit oregon the commencement of a caller trend. 

On the much encouraging side, a determination backmost supra $62,500 would enactment Bitcoin wrong scope of terms levels wherever leveraged abbreviated positions go much exposed, and continued affirmative buying enactment alongside a still-growing excavation of leveraged positions would widen the signifier seen implicit the past fewer days. 

Bitcoin liquidation heatmap. One-month view. Source: Hyblock

The wide marketplace work is mixed alternatively than intelligibly bullish oregon bearish. Spot buying and a rebound successful ETF flows suggest sentiment whitethorn beryllium improving faster than the fear-and-greed fig implies, but a marketplace this profoundly fearful and this leveraged toward higher prices tends to beryllium much fragile. The upcoming US holiday-weekend agelong of typically thinner trading adds different furniture of uncertainty to the existent setup.