TechFlow news, according to the latest Bitfinex Alpha report, on July 3 Bitcoin's price dropped below its 120-day range to $53,219, driven by market concerns over potential sell-offs from the German government and Mt. Gox creditors. However, weekend market data suggests a potential local bottom may be forming:
1. Despite the German government transferring a large amount of BTC to exchanges, the volume is relatively small compared to all Bitcoin bought and sold since 2023.
2. Volatility indicators show a narrowing gap between implied and historical volatility, suggesting the market expects greater stability ahead, implying BTC could consolidate at current levels or at least avoid significant downside.
3. Bearish positioning reflects complacency, with low volumes of short liquidations indicating a large number of "late bears" during any rebound, lacking clear directional conviction.
Selling pressure from short-term holders may be nearing exhaustion, as evidenced by a Short-Term Holder Spent Output Profit Ratio (SOPR) of 0.97, indicating this cohort is now selling at a loss. Historically, such conditions have preceded price rebounds once selling pressure eases.
In addition, funding rates for BTC perpetual contracts turned negative for the first time since May 1, potentially signaling increased bearish sentiment, but also reinforcing the view that BTC may be stabilizing or nearing a bottom. A combination of negative funding rates and low short-term SOPR values has historically marked the bottom of price corrections.
On the macro front, minutes from the Federal Reserve meeting indicate that although softer labor market data and easing inflation support a case for looser monetary policy, officials remain highly cautious about rate cuts. The current unemployment rate stands at 4.1%, the highest since November 2021, reflecting an economy adjusting long-term growth and hiring trends. No rate cut is expected during the July 30–31 policy meeting, though hopes remain for a cut in September.
