Bitcoin Fear Deepens as $60,000 Support Faces Key July Test

Bitcoin climbed back above $60,000 after Federal Reserve Chair Kevin Warsh said inflation risks had eased, but caution is building ahead of the U.S. June jobs report. In the near term, the market first needs to show it can hold the $60,000 support level before any shift in momentum can be confirmed.

As of 5:50 p.m. on July 2, Bitcoin was trading at $60,528 on Binance's USDT market, up 2.93% from a day earlier. On Upbit, it was quoted at $66,300, equivalent to 91.63 million won. The so-called kimchi premium, which tracks the gap between domestic and overseas exchange prices, was negative 2.21%.

Warsh Says Inflation Risks Have Eased, but Prices Remain Too High Ahead of Jobs Report

Warsh told the European Central Bank's central banking forum in Sintra, Portugal, on July 1 that inflation expectations had fallen over the past four weeks and inflation risks had also eased. The remarks appeared to reflect steadier oil prices after the U.S.-Iran ceasefire. Even so, he said prices remain too high and underscored the need to restore price stability.

He also kept a cautious stance on monetary policy. Warsh declined to directly answer a question on the possibility of a rate increase and reaffirmed the Fed's intention to provide less forward guidance on the rate path. He added that the central bank needs to gradually shrink its enlarged balance sheet.

Market focus has since shifted to the U.S. June employment report, released at 9:30 p.m. Korea time on July 2. The Labor Department said nonfarm payrolls increased by 57,000 in June, while the unemployment rate stood at 4.2%.

CME Group's FedWatch tool showed the federal funds futures market pricing in a 70.6% chance of no change at the July Federal Open Market Committee meeting and a 29.4% chance of a rate increase. The odds of at least a 25-basis-point increase by the end of December were about 70%.

ETF Outflows and Potential Strategy Sales Weigh on Bitcoin, Even as July Rebound Hopes Linger

Against that backdrop, U.S.-listed spot Bitcoin exchange-traded funds recorded net outflows of $1.7873 billion last week and have continued to see money leave the funds. News that Strategy could sell as much as $1.25 billion of Bitcoin to fund dividends and other uses added to the pressure. Right after the announcement, the market focused on the prospect of stronger financial stability from a larger U.S. dollar reserve position. Attention later returned to the possibility of Bitcoin sales, weakening investor sentiment.

On-chain analytics firm Santiment said spot Bitcoin ETFs have logged total net outflows of $8.475 billion since May 6. The longer that trend persists, the less it looks like a fresh reason to sell and the more it reflects mounting investor frustration, fear and retail capitulation.

Deeper outflows could weigh on prices in the short term, Santiment said. But they may also suggest that many investors inclined to sell have already exited, meaning Bitcoin could be nearing a major bottom.

Some analysts also view extremely depressed sentiment as a sign Bitcoin may be entering a bottoming phase. In a weekly research report, on-chain analytics firm Glassnode said long-term holders and patient buyers have started absorbing supply beneath the surface. Spot order books on Binance and Coinbase are also tilting toward buyers, it said.

Glassnode said on-chain data points to a shift from distribution to accumulation, though further confirmation is still needed. It added that leveraged long positions are rising quickly in derivatives markets, which could intensify liquidation pressure if support levels give way.

Seasonal patterns also suggest July could become a turning point for a rebound. Digital-asset research firm Swissblock said that even in the 2018 and 2022 bear markets, selling pressure and investor fatigue persisted through May and June before relief rallies emerged in July. If a similar pattern repeats this year, July could mark the start of a relief rally.

Can Bitcoin Hold $60,000? Analysts Say Market Needs Two to Three Weeks of Stability

With the defense of the $60,000 support level emerging as the key variable, analysts say investors should focus less on chasing a rebound and more on confirming price stability and a recovery in momentum over the next two to three weeks.

Julien Pineda, an analyst at Forex.com, said Bitcoin has risen more than 2.6% recently and has tried to reclaim $60,000, but demand is not yet strong enough to reverse the weakness of the past several weeks.

He said $62,170 marks a short-term neutral zone and $64,600 a major resistance level. Bitcoin needs to reclaim both levels for buyer control to strengthen again.

A break below the recent low of $57,790 would put sellers back in control and deepen the downtrend, he added.

The recovery has remained sluggish even after Bitcoin fell more than 20% last month. Alex Kuptsikevich, chief analyst at FxPro, said Bitcoin slid to as low as $57,800 intraday on July 1 before recovering $59,000 and then $60,000, but the rebound attempt is still limited.

He added that July is seasonally considered a relatively favorable month for Bitcoin, but the current bounce is still difficult to view as a trend reversal.

Some analysts also say Bitcoin's move into a long-term oversold zone means the market now needs to prove it can stabilize. Katie Stockton, founder of Fairlead Strategies, said Bitcoin remains in a long-term oversold condition. The $60,000 area is also a psychological support level, and failure to hold it could trigger a deeper retracement, she said.

Stockton said she remains bullish on Bitcoin over the long term. For now, however, with support under heavy pressure, investors should wait for two to three weeks of price stabilization and a momentum shift before increasing exposure.

Kang Min-seung, Bloomingbit reporter minriver@bloomingbit.io