Bitcoin Rebounds 11% From $57,700 Low as On-Chain Demand Recovers

Bitcoin News

Bitcoin (BTC) has staged a roughly 11% rebound from last week's $57,700 low, climbing back toward the $64,000 area as on-chain data points to a genuine shift in demand rather than a simple technical bounce. Our reading of the flow suggests the leading cryptocurrency is sitting at an inflection point between a fading bear-market decline and the early groundwork for renewed strength. The recovery arrived after weeks of relentless selling, and the speed of the move has revived talk of a local bottom. Traders are now watching whether spot buyers can sustain the bid or whether this is another rally destined to be sold into.

The most important signal sits beneath the price action. Combined spot and futures demand contracted by roughly 650,000 BTC in early June — the largest such drawdown since 2022 — and that collapse was a primary driver of the sell-off. On-chain data now shows that measure has clawed back to near-neutral territory, with speculative futures demand rising again and spot selling pressure at its weakest since mid-May. For a market that had been starved of fresh buyers, the stabilization matters more than any single candle. It marks the first sign in months that the structural supply-demand imbalance pressuring Bitcoin may finally be easing.

Seasonality adds a supportive backdrop. Over the past decade, July has historically been one of Bitcoin's stronger months, and the tendency is most pronounced during weak markets: the asset gained roughly 20% in July 2018 and about 17% in July 2022, both bear-market years. Seasonal patterns never dictate price on their own, but a statistically recurring bias is a meaningful reference point when it aligns with improving fundamentals. Desk observers note that investor psychology often improves in July even when the broader tape stays heavy. The convergence of a favorable calendar and recovering demand is precisely the setup bulls have been waiting for after a punishing quarter.

United States demand is also turning. The Coinbase Premium Index — a widely tracked gauge of American spot appetite that compares Bitcoin's price on the US exchange against offshore venues — plunged deep into negative territory in early June, signaling aggressive domestic selling. That discount has since narrowed sharply. A shrinking negative premium implies US selling pressure is fading and that institutional buyers may be quietly returning. In a market increasingly steered by spot ETFs and large allocators, the health of American demand carries outsized weight. Our reading of the indicator suggests the heaviest phase of stateside distribution is likely behind the market.

On-chain positioning confirms that short-term holders took the brunt of the pain. Investors holding coins for one to three months saw their unrealized loss deepen to roughly negative 24% at the trough — well past the negative 12% threshold that has historically marked a short-term value zone and often precedes rebounds. That reading points to heavy capitulation among recent buyers. Yet caution remains warranted: a proprietary composite Bull Score Index still sits at just 20, deep in bear-market territory, and only a move above 60 would confirm a durable trend reversal. The message is nuanced — the worst may be over, but a new bull market is not yet confirmed.

Bitcoin's relative strength is most visible against the altcoin complex. XRP has extended a multi-month slide versus Bitcoin, hovering near 0.00001735 BTC and flirting with its weakest close against the benchmark since the start of the year. The token has shed about 53% of its value over the past year in dollar terms, a weakness magnified when priced against a firmer Bitcoin. On-chain data adds intrigue: the Binance XRP Scarcity Index recently spiked to about 0.77, its highest since mid-2024, even as spot XRP ETFs logged a $7.29 million net outflow on July 8. The pattern of lower highs underscores how capital keeps rotating toward Bitcoin.

COINOTAG's proprietary 42-indicator composite S/R scoring engine rates the $63,819 resistance at 81/100 — its strongest overhead level — driven by a confluence of the Fibonacci 0.236 retracement and the previous day's high, while the $63,160 support scores 79/100 on the back of a MACD cross, point of control and pivot point. Derivatives data shows a mildly positive 0.0048% funding rate, $12.18 billion in open interest and a long/short account ratio of 1.55, meaning 60.8% of accounts lean long. With RSI neutral at 50 and the Fear & Greed Index mired at 22 (Extreme Fear), a decisive break above $63,819 opens the path to $67,369; a loss of the $60,656 support (68/100) would invalidate the recovery thesis.