Chip stocks continued to collapse, but Bitcoin held firm.

Author: Bootly, BitpushNews

On Tuesday, Wall Street closed with a continued bloodbath in the memory chip sector.

The Dow Jones Industrial Average initially closed down 0.25%, the S&P 500 down 0.45%, and the Nasdaq Composite down 1.16%. Memory chip stocks saw increased pullbacks—SanDisk (SNDK.O) fell 7%, Western Digital (WDC.O) fell nearly 8%, Micron Technology (MU.O) fell 4.7%, and SpaceX (SPCX.O) fell nearly 7%.

Bitcoin briefly touched a two-week high of $64,597 during the session before retreating slightly, eventually stabilizing above $63,500.

Bitcoin has retreated slightly after hitting a two-week high of $64,597, eventually stabilizing above $63,500.

On a trading day when the Nasdaq fell by more than 1% and the chip sector suffered a collective collapse, Bitcoin's decline was far less than that of tech stocks—once again demonstrating a "relatively independent" market trend. The Truth Behind the Short-Term Rebound: Short Covering Dominates What exactly is driving this rebound? On-chain data shows that Bitcoin futures open interest (OI) has fallen from a high of 776,000 BTC on July 3 to 740,000 BTC, indicating that derivatives traders did not participate in this rally. Meanwhile, the Coinbase premium remains negative, indicating that spot demand from US investors remains weak. In other words, this rebound is more a result of short squeeze than new long entry. Bitfinex analysts stated in a report, "This support level has not been confirmed until BlackRock's IBIT demonstrates sustained structural institutional demand." Glassnode's market report also points out that current spot trading volume remains sluggish, while open interest in contracts and long funding rates have increased. ETF Funding: Trend Unconfirmed. Another point to observe is the shift in ETF fund flows. On Monday (July 6), the US spot Bitcoin ETF recorded a net inflow of $265.7 million, the largest single-day net inflow since May. BlackRock's IBIT contributed $209.4 million. Other products saw inflows: Fidelity FBTC $9.7 million, ARK 21Shares ARKB $33 million, and Grayscale Bitcoin Mini Trust $42.3 million—only Grayscale's flagship product GBTC continued to experience outflows of $44.5 million. This marks the second consecutive trading day of positive inflows, following eight consecutive weeks of net outflows for the US spot Bitcoin ETF. In June, ETFs saw a record net outflow of approximately $4.5 billion. However, one piece of data is alarming: as of the week ending July 4th, despite the inflows in the last two days, the weekly net outflow still reached $526.6 million, marking the eighth consecutive week of net outflows. The current stage remains a "repair observation window" rather than a "confirmed turnaround." MicroStrategy Sells Crypto: Timing Not Friendly to Bulls Last week, Strategy sold 3,588 BTC, realizing approximately $216 million, which was used to pay preferred stock dividends. Renowned analyst Ali pointed out on X that the timing of this sale was "not friendly to bulls"—the TD Sequential indicator flashed a sell signal at the same time. The combination of technical signals and institutional selling indeed put pressure on market sentiment. Martinez described this combination as "not what the bulls want to see." However, setting aside short-term noise, several key data points are worth noting: First, the proportion is extremely small. As of July 5th, Strategy still held 843,775 BTC, plus $2.55 billion in cash. The 3,588 BTC represent only about 0.4% of its total holdings. Second, the purpose is clear. Thaler confirmed on X that this sale is specifically for paying dividends on digital credit securities, and is part of capital structure management, not a strategic shift. Third, the net buyer status remains unchanged. Strategy bought 85,296 BTC in the second quarter, while selling only 3,620 BTC during the same period, resulting in a buy/sell ratio of 22.5:1. Technical Analysis: Volatility Predominates. A chart posted on X by renowned trader Daan Crypto Trades shows the correlation between Bitcoin and the Nasdaq, which jumped from -0.87 to +0.72 in just a few days. What does this mean? -0.87 means that the two move almost inversely: when US stocks rise, Bitcoin falls, and vice versa, acting like a hedging tool. +0.72 means that both move in the same direction: when US stocks rise, Bitcoin rises; when US stocks fall, Bitcoin falls, like a tech stock. However, strangely, this correlation has now returned to an intermediate state. Therefore, you can see a split market: the Nasdaq fell by more than 1%, and although Bitcoin also fell, the decline was much smaller than that of tech stocks, and it remained stable above 63,000. It neither completely followed the decline nor exhibited a completely independent trend—this is the intermediate state. The direction it chooses in the next few days is crucial. Daan also mentioned a point: since 2025, Bitcoin has not actually had a fixed correlation for most of the time, but 2026 has already proven one thing—Bitcoin can indeed go its own way for several months in a row, not following US stocks. Returning to the technical aspects... The most important support level is currently in the $62,700 to $62,900 range, which incorporates the 200-week moving average and other key technical levels. If this level holds, the next target for the bulls is the macro resistance level of $69,000; if it fails to hold, a rapid decline towards $58,500 is possible. Additionally, Bitcoin's 30-day implied volatility just jumped to 40%, ending a six-day decline. This indicates market uncertainty about the short-term direction, with everyone waiting for a clearer indication. So, what's next? The core variable remains ETFs. If ETF funds continue to flow back in, Bitcoin has the potential to challenge $69,000; if the inflows of the past two days are merely short-lived, then this rebound is likely just a dead cat bounce.