Key facts
- Bitcoin approached $62,000, capping the market's first strong week since mid-June.
- Ether and Solana saw significant weekly gains, with Solana up 18.6%.
- A short squeeze liquidated $281 million in bearish crypto bets within 24 hours.
- Weaker U.S. jobs data reduced expectations for additional Federal Reserve rate hikes.
- Asian stocks, including South Korea's Kospi, rallied following the U.S. jobs report.
Cryptocurrencies, led by Ether and Solana, experienced a broad rally, with Bitcoin approaching $62,000, marking the market's strongest week since mid-June. This surge was primarily driven by a sharp short squeeze, which liquidated $281 million in bearish bets over 24 hours, with Ether accounting for the largest portion of these liquidations.
Bitcoin traded around $61,360, showing a 2.5% gain over the week. Ether saw a 4.2% increase in 24 hours to approximately $1,702, resulting in a 9.7% weekly gain. Solana performed even stronger, holding near $80 with an 18.6% weekly increase. XRP also contributed to the upward movement, adding 5.7% over the week to $1.09.
Data from Coinglass indicated that total forced closures across 95,690 traders amounted to $440 million, with short liquidations significantly outweighing long liquidations. The mechanism of a short squeeze involves forced buying as short-sellers close their positions, which in turn pushes prices higher, triggering further liquidations.
The macroeconomic environment provided a supportive backdrop. Weaker-than-expected U.S. June employment data released on Thursday reduced market expectations for further Federal Reserve rate hikes. This development also weakened the U.S. dollar against several major currencies, according to Bloomberg.
The easing of rate-hike bets has historically benefited risk assets, including cryptocurrencies and stocks. Gold prices also climbed for a third consecutive day as these expectations faded. Asian stock markets, including South Korea's Kospi, rallied by 3% after experiencing two days of tech-led losses. Samsung Electronics saw a notable 6.8% increase in its stock price following reports of discussions with AI firm Anthropic regarding custom AI chip manufacturing.
Despite the positive momentum, questions linger about the sustainability of the rally. While short squeezes can create rapid price movements, they do not always translate into durable demand. Furthermore, U.S. spot Bitcoin ETFs are still experiencing record monthly outflows, and the market is entering the third quarter with thinner liquidity, which can amplify price swings in both directions.