Bitcoin has rebounded nearly 10% from its July 1 low of $58,293 as inflation breakevens provide bullish signals for the first time since 2024. According to CoinDesk, the U.S. two-year breakeven inflation rate has dropped below 2% for the first time since 2024, with both the two-year breakeven rate and WTI oil prices slipping to levels last seen before the onset of the Iran war in late February. The move follows a weaker-than-expected U.S. nonfarm payrolls report, which showed only 57,000 jobs added in June against forecasts near 110,000, reducing expectations for more Federal Reserve tightening. Crude oil traded below $69 per barrel on Monday as energy flows through the Strait of Hormuz recovered, while OPEC+'s planned 188,000-barrel-per-day production increase fueled concerns over a supply glut, adding to the risk-on sentiment. Bitcoin traded near $62,990 on July 6 after climbing from $58,293 earlier in the week to an intraday high near $64,000, with the latest recovery pushing it back above the $63,000 mark over the weekend as renewed institutional interest and easing macroeconomic concerns supported the broader cryptocurrency market rebound.
Spot Bitcoin ETFs recorded net inflows of $223.5 million on July 2, reversing the previous day's $296 million outflow and marking a significant recovery from the previous month's performance. According to Delta Exchange, US spot Ethereum ETFs also posted $29 million in net inflows, marking a second consecutive day of positive flows. June produced more than $4.5 billion in redemptions and pushed sentiment into extreme fear, with the Crypto Fear & Greed Index falling to 11. Wall Street heavyweights like Fidelity's FBTC led the return with $165.96 million, and ARKB added $91.84 million, while BlackRock's IBIT, the largest fund, still saw $40.43 million leave. June ranked as the worst month on record for the funds, and year-to-date flows stay negative near $5.4 billion, though the latest positive session suggests institutions may be following whale buying patterns. As per Delta Exchange Research Analyst Riya Sehgal, ETF flows have become an important sentiment driver, with Bitcoin remaining above its short-term exponential moving averages but still capped below the 200-day EMA around $63,920. According to WazirX's Nischal Shetty, positive spot ETF inflows after a 10-day outflow streak supported the move, though heavy exchange deposits from large holders kept volatility elevated.
From a technical perspective, Bitcoin is testing the 0.236 Fibonacci retracement level at $63,994 after bouncing from the June low zone near $58,187. According to crypto.news, a clean daily close above that level would open the next resistance area near $67,587, followed by $70,491 and $73,395. The daily MACD histogram has turned positive at about 661, while the MACD line remains below the signal line, and RSI has recovered to 49, just under the neutral 50 level after rising from oversold territory in June. On the four-hour chart, Bitcoin is holding above the Supertrend support near $61,530, with the Aroon Up reading at 78.57 against Aroon Down at 7.14, showing buyers have regained short-term control. According to Delta Exchange's Riya Sehgal, a breakout level could be at 64,000, while WazirX's Nischal Shetty noted that Bitcoin's recovery from the $60,000 zone occurred as daily technical indicators turned neutral and buyers returned after an extended period of selling pressure. The invalidation zone for the bullish case now sits around $62,500, with analysts identifying this as the crucial support level.
CoinGlass's three-day liquidation heatmap shows dense upside liquidity between $64,000 and $65,300, with another pocket near $66,000, creating potential for another round of forced buying if short positions remain crowded above spot. According to crypto.news, downside liquidity is also visible near $62,000, $61,500, and $60,000, matching the support areas identified by traders. Analyst Ted Pillows notes that the $62,500-$62,800 support zone remains crucial, stating that 'if it holds, Bitcoin's next stop would be around $65,000'. However, analyst Lennaert Snyder warned that the move appeared to be driven mainly by short closing rather than fresh spot demand, suggesting the bounce lacks strong follow-through from actual buyers. Some observers are calling for caution, saying the market is overestimating the impact of oil prices on inflation, with YCC Macro noting that 'the Fed can't declare victory simply because gasoline prices move lower' and that 'sticky service-sector inflation is exactly why policymakers are likely to keep rates higher for longer'. Trading volumes remained subdued due to the US Independence Day holiday, which likely amplified price swings in a low-liquidity environment, as noted by ZebPay's Harish Vatnani.
Federal Reserve Chair Kevin Warsh delivered a significant policy shift during his first international appearance at the ECB Forum on Central Banking in Sintra, Portugal. According to reports from Business Standard, Warsh said 'Expectations of inflation over the first four weeks of this period have come down, inflation risks have come down' while reaffirming the central bank's commitment to price stability. Robin Brooks, a senior fellow at the Brookings Institution and former chief economist at the Institute of International Finance, noted that 'that's when the deflationary impulse from falling oil prices should remind everyone that the Fed isn't going to hike and that - if anything - the next move will be a cut'. However, markets betting on aggressive easing may be underestimating how persistent underlying inflation really is, with YCC Macro adding that 'elevated price pressures, they say, are now a structural issue'. The market now enters the third quarter with thinner liquidity, a dynamic that could cut in either direction as institutional participation has grown and BTC now reacts more closely to interest-rate expectations than in earlier cycles. Investors are also watching the release of the US Federal Open Market Committee (FOMC) meeting minutes on July 8, which could provide fresh clues on the Federal Reserve's policy outlook and trigger the next bout of volatility in crypto markets. Separately, WazirX's Nischal Shetty cited a Deutsche Bank Research Institute report warning that rising US debt, persistent fiscal deficits and higher borrowing costs could weaken long-term confidence in the US financial system, which may reinforce Bitcoin's long-term appeal as a scarce, decentralised asset.
