Bitcoin quickly pared losses after a steep drop following Strategy’s announcement of a bitcoin sale.

On July 6, Cointelegraph reported that bitcoin fell to $61,300 immediately after the sale news, then rebounded to around $64,000. The move signalled that buying interest had not fully faded.

The sharp decline was largely driven by Strategy’s bitcoin disposal shaking investor sentiment. Still, as the company secured an additional $216 million in cash capacity, concerns over its ability to pay dividends and address debt eased somewhat. The market is weighing Strategy’s funding structure and the possibility of further sales, not just the disposal itself.

Derivatives indicators showed signs of a near-term recovery. The annualised funding rate for bitcoin perpetual futures rose to 9 percent on July 7. Funding briefly turned negative over the weekend, and its return to positive territory showed that leveraged demand tilted toward declines had eased.

Still, the figure alone did not confirm strong conviction in further gains. The market views current levels as one where bullish and bearish leverage is not heavily skewed to either side.

Options markets were more cautious than futures. On Deribit, put option premiums rose above call option premiums, and the put-to-call ratio stood at 1.15. The indicator often easily exceeds 2 during stress, so it remained below the neutral range, but it also meant the rebound did not immediately translate into optimism.

Flows into spot exchange-traded funds remain a key variable for the rebound. Spot bitcoin ETFs saw net inflows of $223 million on July 4, the first net inflow after 10 straight trading days of net outflows. With June net outflows swelling to $4.51 billion and weighing on sentiment, the market is now focused on whether the shift to inflows will continue.

Pressure surrounding Strategy also remains. A fall in the price of the company’s preferred perpetual stock, STRC US, has been cited as a factor in recent bearish sentiment. The product touts a 12 percent yield, but new share issuance is possible only at a fixed price of $100, leaving fewer means for now to support dividend funding. Still, Strategy holds cash-like assets sufficient to cover dividends for 17 months, raising questions about whether it must rush into further bitcoin sales.

On the supply-demand side, there were also signs that selling pressure from long-term holders is easing. The amount of bitcoin long-term holders moved to exchanges averaged 4,130 BTC per day, down sharply from 8,040 BTC a week earlier. On-chain data suggest that selling fatigue is building and support around $60,000 could strengthen.

More conditions are needed to conclude that an uptrend has resumed. Strategy is carrying unrealised losses of $8 billion on its bitcoin purchases, and the market remains wary of that overhang. In addition, without consecutive, meaningful net inflows into spot bitcoin ETFs, derivatives participants are unlikely to readily trust a rally above $65,000.

Ultimately, the bitcoin market appears to be in a phase where a short-term rebound and structural caution coexist. Prices quickly absorbed the shock from Strategy’s sale, but bearish pressure could grow again if sustained ETF inflows and improving derivatives sentiment do not follow.