Bitcoin (BTC) trades slightly above $62,000 and is down nearly 2% over the past 24 hours amid a risk-off mood across global markets. The pressure is not coming from crypto exclusively and is more so attributed to a sharp selloff in semiconductor and AI stocks. 

Renewed profit-taking from Samsung sent Asian markets reeling overnight, and military escalation between the US and Iran sent oil up around 5%. As a result, US stocks opened lower, and on Wednesday the Federal Reserve released the minutes from its June meeting, a report traders typically watch closely for clues on the timing of any rate cut. 

Currently, markets price roughly a 73% chance the Fed holds rates steady at its next meeting on July 29, but the major takeaway for investors will be how the tone of the minutes frames the Fed’s view on inflation and interest rates.  

Bitcoin buyers quickly became sellers 

Bitcoin’s cumulative volume delta (CVD) showed traders buying on Monday, with futures CVD adding about $585 million and spot CVD adding nearly $119 million, for a combined $705 million in net buying as BTC rallied above $64,000. 

By Wednesday, the mood had shifted to reflect traders’ apprehension and the need to cut risk ahead of oil’s advance, the semiconductor selloff and the pending release of the Fed minutes. Futures market selling accelerated to nearly $500 million and spot followed with a $86 million sell volume. 

BTC/USD spot and futures CVD. Source: Hyblock

Bitcoin’s funding rate and open interest dropped, reflecting traders’ choice to cut positioning, but the week-long trend of positive funding rates remains intact. 

BTC/USD funding rate, open interest. Source: Hyblock

Liquidations have also stayed relatively small in dollar terms, but they are one-sided. Wednesday’s forced selling was almost entirely on the long side, with roughly $47 million in long liquidations versus about $4 million in short liquidations. 

Hyblock’s liquidation data shows a large cluster of long positions near $61,000 and if Bitcoin trades down into that zone, those forced sales can briefly accelerate the move lower. 

A trend reversal is not confirmed 

Although Bitcoin bulls put in a good effort, absorbing dips to $60,000 and below, and fresh flows from spot markets and BTC ETF buying show investor appetite in the current range, the bulk of the price move remains driven by futures activity. 

Wednesday’s price action demonstrates how fast conviction and price can unravel when the primary fuel behind the move is futures-driven, and sentiment across the crypto market remains in the “fear” category according to the Crypto Fear & Greed index.

Crypto Fear & Greed Index. Source: Alternative.me

Beyond the geopolitical and Fed-related impact on intra-day price action, Strategy’s recent sale of 3,588 BTC and the fact that Bitcoin’s current price is below its $74,582 average price have cast an ominous cloud over the wider market as investors grapple with the reality that the largest BTC treasury could become a frequent seller.