Bitcoin Rebounds Toward $64K as Short Squeeze Eases Pressure; Exchange Reserves Rise

Bitcoin's slide in late June marked the first notable repositioning after weeks of muted derivatives activity. Attempts to push prices lower via aggressive short selling succeeded only twice, including a dip to $57.8K. Spot-market selling never became strong enough to keep buyers sidelined, allowing the market to stabilize and turn higher. Open interest jumped over the prior week and peaked near 530k BTC before a wave of liquidations quickly stripped out much of the added leverage. From the $57.8K low, Bitcoin recovered to roughly $64K, prompting bearish positions to unwind as new long exposure entered the market. Momentum also improved in derivatives pricing. Funding rates moved from negative to slightly positive, pointing to better sentiment without signs of excessive leverage. With downside pressure fading, steady spot demand forced crowded shorts to cover, reinforcing the rebound. Exchange flows offered a separate read on demand. Recent data show withdrawals from exchanges have continued to slow over the past few months. Exchange reserves rose to about 2.66 million BTC from roughly 2.25 million BTC last October, and the six-month reserve change turned positive for the first time since September. The increase suggests fewer holders are moving BTC into long-term storage, leaving more supply on trading venues. Even with the rise, reserves remain well below levels seen near the prior cycle's peak. If new demand does not absorb the additional on-exchange supply, the larger exchange balance could cap future upside. Bottom line: the short squeeze helped reduce immediate selling pressure, but sustained spot demand remains the main driver for further gains. At the same time, softer accumulation and rising exchange balances could weigh on Bitcoin's longer-term recovery despite improving sentiment.