Bitcoin rebounds above $60,000 after $59K test as bears retain control

Bitcoin stabilized above $60,000 after briefly testing support near $59,000, but technical indicators continue to favor sellers.

Bitcoin recovered to $61,000 after dipping to $59,060, with $850 million in crypto long liquidations resetting leveraged positions across the market. The rebound from the same support area that sparked a recovery earlier this month has done little to shift the bearish structure, with price trading below the 20, 50, 100, and 200-day exponential moving averages at $64,300, $68,200, $71,500, and $77,200 respectively.

More than $400 million of the $850 million in total liquidations were tied to Bitcoin long positions as the cryptocurrency lost the $60,000 level during the Asian session, Coinglass data shows. The liquidation cascade followed a breakdown below $60,000 that accelerated after Strategy, the largest corporate Bitcoin holder, reported its smallest weekly purchase in 18 months — just 520 BTC for about $35 million. The firm simultaneously sold $335.5 million in equity shares and rebuilt its cash reserves to roughly $1.4 billion, according to SEC filings.

Spot Bitcoin ETFs added to the selling pressure, with heavy net outflows since June 17 coinciding with disappointment that Strategy's stock was trading below the cost basis of its Bitcoin reserves. Macro conditions compounded the headwinds: the US dollar climbed to a 13-month high against a basket of major currencies, while gold slipped below $4,000 for the first time in seven months as oil prices retreated following a US-Iran memorandum that temporarily reopened the Strait of Hormuz.

Bitcoin now faces resistance at the 20-day EMA near $64,300, with a dense cluster of short liquidations between $61,700 and $62,300 providing a potential upside target if buyers maintain control. A break below $59,000, however, could trigger another wave of long liquidations toward liquidity pockets in the upper $58,000 region and near $57,300, Coinglass heatmap data shows.

Traders Eye Relief Bounce Despite Bearish Structure

Despite the bearish setup, some traders anticipate a relief bounce. Pseudonymous trader Killa said a move toward $70,000 is due once the current low-timeframe consolidation resolves, while RektProof expects Bitcoin to trade in a range with $60,000 as its floor "for the rest of the month." The conflicting signals highlight the uncertainty around Bitcoin's next directional move as the market digests the liquidation event and awaits the May Personal Consumption Expenditures inflation report, the Federal Reserve's preferred gauge.

A broader macro shift could provide a tailwind. RBC Capital Markets strategists warned that the US dollar may be entering a protracted sell-off similar to the decline that followed the 2000 internet bubble, with the DXY forming a symmetrical triangle pattern on the weekly chart. Bitcoin's inverse correlation with the dollar, now the most negative since early 2023, suggests that a dollar breakdown could ignite a rotation into crypto, with a falling wedge pattern on Bitcoin's daily chart pointing to a potential 20 percent rally toward $123,700 if confirmed.

This article is for informational purposes only and does not constitute investment advice.