Bitcoin rebounds above $63,000 as Strategy BTC sale fails to rattle bulls

Bitcoin rose 2.2% to $64,280 after recovering from a flash drop to $61,300 triggered by Strategy's sale of 3,588 BTC for $216 million to fund preferred stock dividends.

Data from Laevitas shows the Bitcoin perpetual futures annualized funding rate jumped to 9% on Monday, indicating balanced demand between bullish and bearish leverage after turning negative over the weekend. The options market reflected mild stress, with the put-to-call ratio at Deribit rising to 1.15 from below parity on Thursday and Friday, though remaining well below the 2.0 threshold typically associated with panic.

US spot Bitcoin ETFs recorded $223 million in net inflows on July 3, the first positive day after 10 consecutive outflows totaling $4.51 billion in June, according to SoSoValue data. Transfers from long-term holders to exchanges dropped to 4,130 BTC per day from 8,040 BTC one week prior, Glassnode data shows, pointing to reduced selling pressure from the cohort that typically sets market bottoms.

The recovery above $63,000 strengthens the $60,000 support level, but sustained momentum above $65,000 depends on consistent ETF inflows, according to derivatives data. Strategy now holds $2.55 billion in cash reserves, enough to cover 17 months of preferred stock dividends, reducing the urgency for additional Bitcoin sales that weighed on the market in recent weeks.

ETF Flows and Long-Term Holder Conviction

The $223 million ETF inflow on July 3 marked a potential turning point after June's record outflows. If sustained, the reversal could provide the catalyst needed for a rally above $65,000, a level that has acted as resistance since late June.

Strategy's $8.32 billion unrealized loss on its Bitcoin holdings — booked at an average purchase price of $75,476 per BTC — remains a headwind for sentiment. However, the company's decision to sell BTC rather than issue new equity under its $1.25 billion at-the-market program suggests management is prioritizing dividend coverage on its 12% yielding STRC preferred stock over accumulation. The company's net Bitcoin position increased by only 69 coins over the past month despite deploying roughly $20 million in additional capital, crypto trader KALEO noted on X, implying an average cost above $289,000 for those incremental holdings.

Bitcoin bears retain the upper hand given the scale of Strategy's unrealized losses and lingering skepticism in derivatives markets. But the combination of declining long-term holder selling, a potential ETF flow reversal, and reduced pressure from Strategy's balance sheet needs creates a setup that could favor a sustained move higher if $65,000 is breached.

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