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Bitcoin price dropped 7% on July 8 as it retested the $53,354 level, causing minor damage to bullish positions with $62 million in leveraged longs (buy) being liquidated. However, a subsequent 7% rally to $58,215 in less than 8 hours caught bears off guard, resulting in $96 million in short (sell) positions being forcefully terminated.
<h2 id="bitcoin-s-temporary-intraday-pullback-took-short-sellers-by-surprise">Bitcoin’s temporary intraday pullback took short sellers by surprise</h2>
On July 8, the Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>)&nbsp;&nbsp;price returned to the exact $57,200 level from 24 hours earlier. This liquidation data suggests that the entities betting on a price decline, which caused a 6,350 increase in open interest on July 7 — equivalent to $355 million — used high leverage, possibly 20x or more. The price increase on July 8 wiped out all the gains in open interest.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-07/97db8a5f-fe7f-4b05-82d6-884b91561a19.png" alt="Bitcoin bulls refuse to flip bearish despite the $53,300 retest">
 <figcaption style="text-align: center;">
 Bitcoin aggregate open interest, 12-hour, BTC. Source: CoinGlass
 </figcaption>
</figure>
This data helps explain why BTC derivatives continue to show moderate bullishness, creating a positive outlook for reclaiming $60,000 soon.
Cryptocurrency analysts believe that the German government's transfer of 16,308 BTC to market makers and exchanges in the past 24 hours was a key factor in reducing Bitcoin traders’ appetite. However, this event also provides a silver lining for bulls, as they have already sold half of the seized coins, indicating that the selling pressure is decreasing.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-07/4f781998-f4fe-4402-bfde-53b5c74e029b.png" alt="Bitcoin bulls refuse to flip bearish despite the $53,300 retest" title="">
 <figcaption style="text-align: center;">
 Source: <a href="https://x.com/RookieXBT/status/1810336454499000420" target="_blank" rel="noopener nofollow">RookieXBT</a>
 </figcaption>
</figure>
According to trader and influencer RookieXBT, Bitcoin investors are likely to wait to add positions until the German government nearly completes its sales. Moreover, the potential sell-off from the Mt. Gox bankruptcy estate <a href="https://cointelegraph.com/news/mt-gox-repayments-begin-bitcoin-bitcoin-cash">distributing coins</a> after 10 years could impact the market. 
On the other hand, RookieXBT points out that the failed FTX exchange is expected to <a href="https://cointelegraph.com/news/cash-or-crypto-ftx-creditors-vote-how-recovered-funds-paid-back">distribute cash</a> to investors affected by its bankruptcy, which could be used to purchase cryptocurrencies.
The remainder of the analysis is highly debatable and more focused on long-term aspects, including the shift of the United States central bank to an expansionist monetary policy and the results of the U.S. presidential election. 
Additionally, the ongoing stock market rally, which reached another all-time high on July 8, is often overlooked by analysts despite companies holding a record $4.11 trillion in <a href="https://www.bloomberg.com/news/articles/2024-06-13/cash-holdings-by-us-corporates-surge-to-4-11-trillion-in-the-first-quarter" target="_blank" rel="noopener nofollow">cash</a> and equivalents, according to Bloomberg.
The S&amp;P 500 benefits from the high margins of tech companies and offers a relatively safe investment through dividends and the potential for market consolidation. Even if the economy slows down, a few cash-rich companies will be able to buy out competitors and expand their operations at a lower cost. In essence, a weaker job market partially offsets the recessionary environment as companies face less competition in hiring.
<h2 id="bitcoin-derivatives-show-resilience-but-macroeconomic-conditions-remain-uncertain">Bitcoin derivatives show resilience, but macroeconomic conditions remain uncertain</h2>
Besides the factors like the German government <a href="https://cointelegraph.com/news/german-govt-shifts-3k-btc-one-hour">liquidating Bitcoin</a> and potential FTX repayments, further support for Bitcoin's bullishness comes from the futures and options markets. In stable market conditions, monthly contracts typically trade at a premium of 5% to 10% over spot markets due to their longer settlement periods.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-07/170aec8d-e4f3-48fc-a88d-ba40f64c18d5.png" alt="Bitcoin bulls refuse to flip bearish despite the $53,300 retest">
 <figcaption style="text-align: center;">
 Bitcoin 3-month futures annualized premium. Source: Laevitas.ch
 </figcaption>
</figure>
According to data from Laevitas.ch, the annualized premium for BTC futures stabilized near 8% since July 7. Despite this indicator hinting at worsening sentiment, it has remained at a neutral level, which is relatively positive considering Bitcoin's 11% price decline over the past seven days.
Related: <a href="https://cointelegraph.com/news/digital-asset-investments-441-million-inflows">Bitcoin weakness spurs $441M digital asset inflows</a>
Analyzing the options market provides insight into the dynamics at play. In a market optimistic about rising prices, you would typically see a -7% delta skew, as put (sell) options become cheaper than similar call (buy) options. Conversely, a skew metric above 7% usually indicates imminent fear of price corrections.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-07/c6602967-dc17-4a43-bf2d-79dc22ed549a.png" alt="Bitcoin bulls refuse to flip bearish despite the $53,300 retest">
 <figcaption style="text-align: center;">
 Bitcoin 2-month options 25% delta skew. Source: Laevitas
 </figcaption>
</figure>
The current -2% skew in the Bitcoin options market reflects a healthy market sentiment, particularly noteworthy as the BTC price approaches its lowest levels in over four months. However, it remains uncertain if the <a href="https://cointelegraph.com/news/bitcoin-local-bottom-bitfinex-mt-gox">$55,000 support</a> level will hold, given the FUD involving miners' sell pressure and the potential negative impact on Bitcoin if an economic recession is confirmed.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin bulls refuse to flip bearish despite the $53,300 retest

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