Bitcoin 65,000 USD level remains in a tug-of-war: what do liquidation data and a divergence in the Fear Index mean?

Two weeks ago on July 2, Bitcoin was still struggling around a low of $59,660. As U.S. June CPI and PPI data consecutively came in below expectations, the market repaired along its “rate-cut expectations” path. Bitcoin briefly broke above $65,600, setting a new high since June 22. However, prices have fallen back, and sentiment has not.

As of July 16, 2026, Bitcoin is still repeatedly swinging around the $65,000 level. Over the past 24 hours, total liquidations across the entire network amounted to $309 million, with 78k people liquidated. The Fear and Greed Index has remained in the “Extreme Fear” range for more than a week in a row; the latest reading is 25.

The divergence between the price rebound and the sentiment bottom constitutes the most structural contradiction worth dissecting in the current crypto market.

Bitcoin stands above $65,000—why it can’t hold

In the past 24 hours, Bitcoin has been trading in a wide range between $64,485 and $65,600. After hitting the $65,600 intraday high, it failed to hold. This morning, it slid back to around $64,600, down about 0.3% over the last 24 hours. On the hourly chart, Bitcoin’s recent 14-day peak of $65,385 occurred at 23:00 on July 15—after a spike last night, the pullback only took one night.

On the macro front, U.S. June PPI came in below market expectations, following the cooling CPI from the previous day, strengthening the market’s expectations for further easing by the Federal Reserve. The three major U.S. stock indexes all closed higher that day, but Bitcoin’s “inflation bonus” only materialized for half a day. The market is still trading around $65,000 and has not shown a breakout with expanding volume. There is clear pressure in the $65,000 to $65,600 range; this is the peak zone of the current rebound.

Technically, after the price touched the $65,588 high, upward momentum continued to fade, and the highs kept stepping down. High-level profit-taking has kept releasing, and short-side strength has gradually taken the short-term lead. The $64,000 to $64,200 zone is the short-term support band. Until new major catalysts appear, the tug-of-war around the $65,000 level may continue.

Behind the $309 million liquidation—who is getting liquidated on both sides

Based on on-chain data, as of the July 16 press time, across the entire network in the past 24 hours, 78,540 traders were liquidated, with a total liquidation amount of about $309 million. Of this, $184 million of short positions were liquidated and $125 million of long positions were liquidated—shorts account for nearly 60%.

A liquidation structure dominated by shorts directly reflects the large number of shorts being squeezed during the overnight push higher. When Bitcoin broke above $65,000, short leveraged positions faced centralized liquidation, creating a short-term short squeeze effect. However, as price pushed up and then fell back, longs began to feel pressure too—short-term long buyers who chased the rally began batch stop-loss exits.

Large capital also showed a clear split in attitude. On one hand, “smart money” with abundant liquidity opened a short position on BTC with 12x leverage worth $54 million. On the other hand, within only 45 minutes, four smart money addresses collectively switched to long positions, buying positions worth a combined $11.8 million. Around $65,000, it has become the most intense contested area for both longs and shorts.

Judging by the magnitude of liquidation risk: if BTC falls below $61,915, the cumulative liquidation strength of mainstream CEX long positions would reach $78k; conversely, if BTC breaks above $67,763, the cumulative liquidation strength of cumulative short positions would reach $1.21B. This means significant leveraged risks have accumulated on both sides of the current price, and any effective breakout in either direction could trigger a chain liquidation reaction.

Fear and Greed Index at 25—how long has “Extreme Fear” lasted

The Fear and Greed Index is one of the most widely cited indicators for measuring crypto market sentiment. It ranges from 0 to 100; below 25 is the “Extreme Fear” range. On July 16, the index was 25, the same as the previous trading day, having stayed in Extreme Fear for more than a week continuously.

Placing 25 into historical coordinates: over the past seven days, the index’s average value was 23; over the past 30 days, the average was only 19. This means that for roughly the past month, market sentiment has almost always been suppressed within the Extreme Fear range.

More noteworthy is the duration. Since early February 2026, the Fear and Greed Index has continued to report at below 20 in the “Extreme Fear” range. As of July 10, Extreme Fear had persisted for more than five months—one of the longest continuous Extreme Fear periods since the index was released. For comparison, during March 2020’s “Black Thursday,” Extreme Fear lasted 28 days; during November 2022’s FTX collapse, it lasted 22 days. The length of the current cycle already far exceeds the historically comparable intervals.

On July 1, the index briefly fell to 11, one of the lowest readings since 2026. After that, although it rebounded briefly to 28 on July 7, it quickly slipped back to 19, and on July 10 it returned to 22. This kind of “rebound—give-back—stabilize again” trend suggests that the current market’s sentiment repair lacks sustained support.

Why price rebounds and Extreme Fear exist at the same time

From $59,660 to above $65,000, the price rebound is more than 8%, but the Fear index has only recovered from 11 to 25. This divergence can be understood on three levels.

First, persistent drag from non-price factors. Among the six component factors of the Fear and Greed Index, volatility (25%) and market momentum and trading volume (25%) are directly linked to price behavior. When Bitcoin rebounds from a low, volatility contracts and price momentum turns positive—these factors should raise the index reading. But factors such as social media activity, changes in Bitcoin dominance, and search trends have not improved in sync. Crypto social discussion heat has dropped to the second-lowest level since October 2024—prices are up, but market participants are not truly “believing” that upside move.

Second, the lack of sustained capital inflows. Although U.S. spot Bitcoin ETFs saw stage net inflows in July, throughout June the net outflow from Bitcoin ETFs was $4.06 billion, the largest single-month outflow since listing. Daily inflows are still not enough—relative to the scale of monthly outflows—to reverse the trend. The return of capital has been marginal and tentative rather than systemic.

Third, macro uncertainty remains a suppressing force. Even if inflation data has cooled in the short term, the interest-rate guidance from the end-of-month FOMC meeting and the potential impact of Middle East developments on oil prices remain uncertainties hanging over the market. The Fed’s Beige Book shows the U.S. economy is still maintaining moderate growth; the Fed will most likely continue to observe data and not adjust policy quickly. The Bank of Korea unexpectedly announced a rate hike as well, indicating global capital remains sensitive to monetary policy across countries. The combined weight of triple pressure encourages both retail and institutional investors to take a wait-and-see stance.

What the Extreme Fear state implies for the outlook

Historical data provides some reference samples for the relationship between Extreme Fear and cycle bottoms. In March 2020, Bitcoin fell 50% in two days to $4,000; the Fear index dropped to 8, and the bottom was ultimately established after the Federal Reserve rolled out zero interest rate and quantitative easing policies. During the FTX blowup in November 2022, the index fell to around 12 as well, corresponding to the price bottom of that cycle.

But historical analogies need caution. The current Extreme Fear has lasted far longer than any previous instance. That means two possibilities: either the market is experiencing an unprecedented long and drawn-out bottom-building process, or the current structural suppression factors are fundamentally different from past cycles. In February 2026, the index once fell to 5—an extremely rare historical point. After that, even though it rebounded slightly, it never managed to get out of the Extreme Fear region.

From the microstructure of the derivatives market, the long-short battle around $65,000 is still intensifying. Trapped positions at higher levels and profit-taking sell pressure are heavily stacked in the $65,200 to $65,600 range. This suggests it may be difficult to achieve an effective breakout of that zone in the short term, and price may continue to trade in a wide range while digesting.

When price and sentiment diverge—what is the market pricing

The combination of a price rebound with cold sentiment points to a deeper question: what is the market “pricing in,” and what is it “pricing out”?

The market is pricing in the rate-cut expectations brought by cooling inflation—this is the core driving force that allowed price to rebound from $59,660 to above $65,000. But the market has not fully priced in: whether inflation could repeat, whether the Middle East situation might escalate, and whether ETF capital can shift from outflows to sustained inflows.

The Fear and Greed Index at 25 reflects the market’s composite pricing of the above uncertainties. Prices are back, but the macro narrative and capital momentum that would support sustained upward price movement have not fully set in. This state does not necessarily mean the market is about to reverse or continue falling—it only indicates the market is at a critical node where direction selection is likely.

For market participants, understanding the logic behind the divergence between price and sentiment may be more valuable than trying to predict the short-term direction of price.

Summary

Bitcoin’s repeated tug-of-war around the $65,000 level is fundamentally a battle between improving macro expectations and lingering market structural doubts. Price rebounded more than 8% from $59,660 to above $65,000, but the Fear and Greed Index has remained in the “Extreme Fear” range at 25 for more than a week—Extreme Fear has lasted for over five months, the longest record since the index was launched. Data showing $309 million liquidations in 24 hours, 78k people liquidated, and shorts accounting for nearly 60% further confirms how intense the long-short battle is in the current derivatives market.

The severe divergence between price and sentiment points to a core judgment: the market is pricing in rate-cut expectations, but it has not priced in uncertainty. Short-term improvement in inflation data has driven a rebound in price, but tentative capital inflows, the risk premium from geopolitical factors, and the ambiguity in the monetary policy path collectively suppress synchronized sentiment repair. $65,000 has become the most contested zone for both longs and shorts; any effective breakout in either direction could trigger chain liquidation reactions. In the current state, understanding the logic of the divergence may be more meaningful than forecasting where price goes next.

Frequently Asked Questions (FAQ)

Q1: What does Fear and Greed Index at 25 mean?

A Fear and Greed Index below 25 is in the “Extreme Fear” range. On July 16, the index was 25 and has been in Extreme Fear for more than a week continuously. The index comprehensively measures factors such as volatility, market momentum, social media activity, and search trends, reflecting the overall sentiment state of market participants.

Q2: Why is Bitcoin up to $65,000, yet the market is still “Extreme Fear”?

The price rebound is mainly driven by rate-cut expectations stemming from cooling inflation data, but the non-price factors in the Fear index (such as social discussion heat and search trends) have not improved in sync. At the same time, the lack of sustained ETF capital inflows, geopolitical risk, and uncertainty in monetary policy all suppress sentiment recovery.

Q3: Shorts make up nearly 60% of the $309 million liquidations—what does that indicate?

$184 million of shorts and $125 million of longs were liquidated, with shorts accounting for nearly 60%. This directly reflects that during Bitcoin’s break above $65,000, a large number of shorts were squeezed. But after the spike and subsequent pullback, longs also began to bear pressure, indicating that the long-short battle around $65,000 is extremely intense.

Q4: How long does Extreme Fear usually last?

The current Extreme Fear state began in early February 2026 and has lasted for more than five months. For comparison, it lasted 28 days during March 2020’s “Black Thursday,” and 22 days during November 2022’s FTX collapse. The length of the current cycle already far exceeds historically comparable ranges.

Q5: Does Extreme Fear always mean a buy signal?

Historical data shows that Extreme Fear cycles in March 2020 and November 2022 both corresponded to price bottoms at that time. But historical comparisons require caution—today’s Extreme Fear has lasted much longer than before, and there are differences in the macro and capital structure versus past cycles. Extreme Fear by itself does not constitute a direct trading signal; it needs to be assessed comprehensively using more dimensions of data.