Bitcoin Rally Stalls as Falling Open Interest Raises Questions About Momentum
Bitcoin fell to its lowest level since 2024 in late June 2026, even as the market accumulated large short positions that set the stage for a short squeeze in July. CoinDesk said open interest gauges capital participation in derivatives markets. If contract positions and demand for U.S. spot ETFs fail to rise alongside the price, the advance may reflect short covering rather than confidence in a new bull market.
CoinDesk reported on July 7, 2026, that bitcoin had retreated from a two-week high of $64,500 reached the previous day, marking its first decline in July. The broader crypto market was still up 8.4% since July 1 at $2.16 trillion. Futures open interest fell to 740,000 BTC from 776,000 BTC on July 3, while more than $500 million in leveraged positions—mostly shorts—were liquidated over 24 hours. Flows into U.S. spot ETFs and the Coinbase premium remained weak.
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The history behind this eventRising Bitcoin Funding Rates Signal Bulls Defending $70,000 as ETF Outflows Stir Concern
After Bitcoin fell below $75,000 in late May, $70,000 became a key line of defense for bulls. Funding rates turned positive and open interest remained elevated, signaling an influx of leveraged long positions. Bitfinex said, however, that U.S. spot ETFs have replaced some direct buying on Coinbase, making ETF flows an important gauge of institutional demand.
As of a May 28 report, U.S. spot ETFs recorded more than $200 million in daily net outflows and over $1.5 billion across seven days. Global open interest fell below $55 billion, down 14% from when Bitcoin traded above $80,000. On June 22, the annualized funding rate rose to a nearly three-week high of 7%, but CoinGlass data showed ETFs still posted $228 million in net outflows over the preceding week, weighing on momentum for a rebound to $70,000.
Bitcoin’s Derivatives-Led Rally Fades as Price Falls Back Below $75,000
10x Research said the rebound was driven mainly by the unwinding of large put-option positions at the $60,000 strike. Market makers were forced to buy Bitcoin to rebalance their exposure, rather than responding to fresh bullish inflows. With no corresponding increase in demand for upside call options, the rally’s staying power remains in doubt.
Bitcoin rose to $75,912 during Asian trading on March 17, 2026, its highest level in six weeks and since February 4, before quickly falling back below $75,000. The CoinDesk 20 Index also slipped to 2,162 from 2,202, while last year’s key support level of $74,400 has now become near-term resistance.
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