Non-farm payroll data triggers market rebound? BTC returns to $61,000, ETH leads with over 6% gain in short squeeze.

On July 3, the crypto market experienced a full-blown short squeeze. Bitcoin rebounded from yesterday's low of $59,776 to around $62,200, gaining 2.86%. As of press time, BTC is temporarily at $61,650, successfully reclaiming the $61,000 integer mark. Ethereum performed even more strongly, rallying from a 24-hour low of $1,605 to an intraday high of $1,735, currently at $1,725, with a single-day gain of 6.26%, leading the major altcoins.

The core driver of this rebound was not large-scale new buying, but the effect of the short squeeze mechanism. The essence of a short squeeze is a chain reaction of leveraged liquidations: when prices unexpectedly rise, a large number of stop-loss orders for short positions are triggered, forcing short sellers to buy assets in the market to close their positions, further pushing up prices, which in turn triggers more short liquidations.

According to CoinGlass data, total liquidations across all networks over the past 24 hours reached $458 million. Focusing on the last 12 hours, liquidations totaled $283 million, with short positions liquidated at $174 million and long positions only $109 million. Over 24 hours, a total of 99,717 people were liquidated across the network, with short liquidations at $299 million far exceeding long liquidations of $159 million. The largest single liquidation came from an ETH-USD order, amounting to $18.2 million. Short sellers were the main victims of this rebound.

From a mathematical perspective of leverage liquidation, when the market's short positions are highly concentrated and prices break out in the opposite direction, liquidation pressure creates a positive feedback loop—each round of short covering provides new fuel for price increases until short leverage is fully cleared or prices hit new resistance levels.

How Macro Data Drives Crypto Asset Rebound

The direct trigger for this short squeeze points to the macro level. The U.S. Bureau of Labor Statistics' June nonfarm payroll report released on July 2 showed only 57k new jobs added, significantly below market expectations of 113k to 115k. Meanwhile, the combined data for April and May was revised downward by 74k jobs. The unemployment rate edged down to 4.2%, but mainly due to a lower labor force participation rate rather than improved hiring conditions.

The disappointing nonfarm data directly lowered the market's bets on the Fed continuing to raise interest rates in the short term. Gate Research data shows that after the data release, the probability of a Fed rate hike in September dropped from 66% to about 51%, and the U.S. dollar index fell 0.55% to 100.85. Rising expectations of a looser monetary environment drove a rebound in risk assets, including Bitcoin.

In addition to employment data, progress in indirect U.S.-Iran talks also pushed oil prices lower, further improving risk appetite in the market. Three macro factors—weak nonfarm data lowering rate hike expectations, easing geopolitical tensions lowering energy prices, and overall improvement in risk appetite—together formed the macro backdrop for this short squeeze.

Notably, gold simultaneously rose to $4,138.16, indicating that the market is still allocating to both safe-haven and elastic assets. The current market conditions are more akin to a corrective rebound after marginal easing of macro pressures rather than a signal of a full trend reversal.

Liquidation Data Verification: Structural Characteristics of $458 Million in Liquidations

The structural characteristics of the liquidation data further verify the short squeeze nature of this rebound.

From a time perspective, liquidations in the last 12 hours totaled $283 million, accounting for 62% of the 24-hour total, indicating that liquidation pressure was highly concentrated in the short period after the rebound started. Short positions liquidated at $174 million vs. long positions at $109 million, meaning short sellers bore about 1.6 times the liquidation pressure of longs.

From an asset perspective, Ethereum became the hardest hit area for short losses. Data shows that short liquidations on Ethereum reached $157 million, higher than Bitcoin's $103 million. This "role reversal"—Ethereum rather than Bitcoin becoming the biggest source of short losses—is relatively rare, reflecting that Ethereum's elasticity in this rebound is significantly higher than Bitcoin's.

From a scale perspective, the largest single liquidation of $18.2 million came from an ETH short position, confirming the vulnerability of high-leverage positions during rapid price rebounds. Nearly 100k people were liquidated across the network, indicating that this is not an isolated event involving individual whales, but a concentrated manifestation of structural liquidations in the leveraged market.

The distribution characteristics of the liquidation data clearly point to one conclusion: among the $458 million in liquidations, short covering was the main driver of price increases, rather than active entry of new long capital.

Key Resistance Levels Analysis: BTC $63,000, ETH $1,800, SOL $85

After the price rebound, key technical resistance levels have become the market's focus.

For Bitcoin, the short-term resistance is concentrated at $63,000. Looking at the 4-hour chart, this rebound started from a low of $57,750. Buyers pushed the price to $62,186.6, but the upward pace has clearly slowed. $63,000 is the middle Bollinger Band resistance on the daily chart. If it breaks through, the upside space could extend to $63,500-$64,000. Short-term support lies in the $60,000-$61,000 range.

For Ethereum, $1,800 is the short-term key resistance level. ETH has rebounded from a low of $1,605 to $1,725, a gain of over 7%, and the short-term deviation is relatively large. The $1,800 level corresponds not only to technical resistance but also to a dense trading zone during the previous decline. Lower support is in the $1,650-$1,700 range.

For Solana, $85 is the short-term resistance level. SOL is currently trading around $81, having touched a 14-day high of $82.2 yesterday. $85 is the key breakdown level for SOL during the June decline. If it can break through effectively, the upside space opens; if it meets resistance and falls back, support lies in the $77-$78 range.

The validity of these resistance levels depends on volume support. If bulls can strongly absorb the overhead selling pressure, new upside space will open; otherwise, prices may retest lower support.

Fear & Greed Index 21 vs. Price Rebound: The Deep Meaning of Divergence

The most noteworthy phenomenon in this rebound is the significant divergence between price and sentiment.

As of July 3, the Crypto Fear & Greed Index stands at 21, still in the "Extreme Fear" zone. The index has gradually recovered from 19 yesterday and 13 last week, but remains deep in fear territory. The 7-day average is 15, and the 30-day average is also 15—the current reading of 21, while improved, is still far from the neutral zone (40-60).

Prices are rising, but sentiment remains in fear; this divergence has a dual meaning.

From a positive perspective, extreme fear often means that the market's chip structure has been thoroughly washed out, with selling pressure drying up. When most participants are bearish, the potential buying power is actually more concentrated—this is exactly the soil for a short squeeze to occur. The Fear & Greed Index moving from 19 to 21, while limited in magnitude, is a direction change worth noting.

From a cautious perspective, sentiment repair lags behind price rebound, meaning the current rally lacks a solid grassroots foundation. Before fear truly fades, the sustainability of the price increase is questionable. Historically, rebounds when the Fear & Greed Index is below 20 are often accompanied by high volatility and repeated retests.

A broader perspective: the Dow Jones Industrial Average hit an all-time high, but the Nasdaq 100 retreated 1.61%, with tech stocks clearly weak. Risk appetite remains structurally divided, and a full recovery in the crypto market still requires broader sentiment resonance.

Sustainability of the Rebound: Three Key Variables

Whether this short squeeze can continue depends on the evolution of the following three key variables.

First, the FOMC policy path. The FOMC meeting on July 28-29 is approaching. Although the nonfarm data has lowered short-term rate hike expectations, the market's expectations for rate cuts throughout the year have significantly contracted. Prediction market Kalshi shows the probability of "zero rate cuts in the entire year 2026" has risen to about 40%. If the FOMC releases a hawkish signal, the current rebound logic based on easing expectations will be challenged.

Second, institutional capital flows. Prices are rebounding, but capital flows remain a headwind. Spot Bitcoin ETFs saw net outflows of up to $4.06 billion in June alone, setting a monthly record; Ethereum ETFs also saw continuous outflows. Institutional capital has yet to return, meaning the current rebound is more driven by leverage liquidation than systematic entry of incremental capital.

Third, the linkage effect with U.S. stocks. Due to the U.S. Independence Day holiday, U.S. stocks were closed all day on July 3. The crypto market will lose this important external variable of stock market sentiment. From today through the weekend, the market may enter a period of shrinking volume and consolidation, testing the validity of key resistance levels without external catalysts.

Overall, this short squeeze is clear in its mechanics and grounded in the macro level, but its sustainability depends on whether these three variables can converge.

Summary

On July 3, 2026, the crypto market experienced a typical short squeeze. Bitcoin broke through $61,000 (+2.86%), Ethereum surged 6.26% to $1,706, and total liquidations across all networks reached $458 million in 24 hours, with shorts accounting for the vast majority.

The triple driving forces of this rebound are clearly identifiable: weak nonfarm data (57k vs. expectations of 110k) lowering rate hike expectations, progress in U.S.-Iran talks lowering oil prices, and overall improvement in risk appetite. The structural characteristics of the liquidation data—short positions liquidated at $299 million vs. longs at $159 million, ETH shorts losing more than BTC—confirm the dominant role of the short squeeze mechanism.

On the technical side, BTC's short-term key resistance is $63,000, ETH's resistance is $1,800, and SOL's resistance is $85. The Fear & Greed Index at 21 remains in extreme fear territory. The divergence between price and sentiment is both fuel for the rebound and a potential risk signal.

Whether the rebound continues depends on the evolution of three key variables: the FOMC policy path, institutional capital flows, and the linkage effect with U.S. stocks. Current market conditions are more akin to a corrective rebound after marginal easing of macro pressures rather than a full trend reversal.

FAQ

Q: What is a short squeeze?

A short squeeze is a market phenomenon where an unexpected price increase forces a large number of short positions to be liquidated, forcing shorts to buy assets to close their positions, further pushing up prices in a positive feedback loop.

Q: What was the scale of liquidations in the crypto market on July 3?

Total liquidations across all networks over the past 24 hours reached $458 million, with short liquidations at $299 million and long liquidations at $159 million; short sellers were the main victims.

Q: What were the macro drivers of this rebound?

The U.S. June nonfarm payrolls added only 57k jobs, far below market expectations of 110k to 115k, lowering expectations for a short-term Fed rate hike. Combined with progress in U.S.-Iran talks lowering oil prices and improved risk appetite, these factors jointly drove the crypto asset rebound.

Q: What are the short-term key resistance levels for Bitcoin, Ethereum, and Solana?

BTC short-term key resistance: $63,000; ETH resistance: $1,800; SOL resistance: $85.

Q: What does a Fear & Greed Index of 21 mean?

A Fear & Greed Index of 21 is still in the "Extreme Fear" range. The divergence of rising prices but fear-driven sentiment indicates both that chips have been thoroughly washed out with selling pressure drying up, and that the rally lacks a solid foundation.

Q: Can this rebound continue?

It depends on three key variables: the policy signals from the late-July FOMC meeting, whether institutional capital (e.g., Bitcoin ETFs) returns, and the sentiment drag after U.S. stocks resume trading post-holiday.