Bitcoin started the week with a sharp rally, pushing close to $64,000 and reaching a local high of $63,900, according to CoinCodex.
The move extended the strong weekend recovery and triggered hundreds of millions of dollars in short liquidations as traders betting against BTC were forced out of their positions.
The rally helped Bitcoin recover from its recent decline. On July 1, BTC had fallen to a local low of $58,293. However, weak U.S. labor market data shifted investor expectations for the Federal Reserve’s next policy moves and helped the leading cryptocurrency quickly recover its previous losses.
Weak Jobs Report Triggers Bitcoin Short Squeeze
The main trigger for the shift in market sentiment was the latest U.S. nonfarm payrolls report, released on Thursday. The report showed that the U.S. economy added only 57,000 jobs in June, far below economists’ expectations.
As a result, investors reduced expectations for tighter Federal Reserve policy. Bitcoin had already received support earlier in the week after comments from former Fed Governor Kevin Warsh on inflation risks.
At the same time, U.S. Treasury yields declined and the U.S. dollar weakened. These factors made non-yielding assets such as Bitcoin more attractive and helped BTC break out of the bearish trend that dominated June.
Spot Bitcoin ETFs also provided additional support. After a prolonged wave of capital outflows, the sector recorded net inflows again. However, institutional investors are still recovering from June’s record $4.5 billion in outflows.
Short Sellers Were Caught Off Guard
More than $450 million in short positions were liquidated after Bitcoin broke above $62,000. The move became a classic short squeeze, as forced short covering fueled further price gains and triggered another wave of liquidations.
The rally also spread to major altcoins. Ether rose by approximately 4% in 24 hours and nearly 10% over the week, while Solana gained about 19%, making it one of the strongest performers among major tokens.
Still, institutional flows have not fully confirmed the move yet. ETFs are only beginning to recover from their worst month since launch, and the broader market remains sensitive to liquidity conditions.
Can the Bitcoin Rally Become a Larger Trend?
The key question now is whether the current short squeeze can turn into a sustained long-term trend.
Forced liquidations often create sharp price moves, but they do not always produce stable organic demand. For Bitcoin to build a stronger trend, buyers will need to keep supporting the market after the liquidation-driven move fades.
The crypto market is also entering the third quarter with reduced liquidity. That could increase volatility in both directions and make the next phase more difficult to read.
For now, Bitcoin’s recovery has put bulls back in control in the short term. However, the market still needs stronger confirmation before the latest rally can be viewed as the start of a lasting trend.
