Crypto Recovery Sees $200M Liquidated as Bitcoin Reclaims $65K, Stocks Rally
Cryptocurrencies and equities staged a coordinated recovery Thursday, with Bitcoin bouncing back above $65,000, while the Nasdaq soared 2.8% on Microsoft's earnings. Nearly $200 million in leveraged crypto shorts were liquidated, highlighting the risks of betting against the market.
Key Takeaways
- Cryptocurrencies and equities staged a coordinated recovery Thursday, with Bitcoin bouncing back above $65,000, while the Nasdaq soared 2.8% on Microsoft's earnings.
- Nearly $200 million in leveraged crypto shorts were liquidated, highlighting the risks of betting against the market.
Mentioned
Key Intelligence
Key Facts
- 1Bitcoin rose 2.16% to $65,112.78; Ethereum up 1.31% to $1,929.21; XRP +1.48% to $1.08; Solana +2.05% to $75.02; Dogecoin +0.72% to $0.07079.
- 2Total crypto market cap reached $2.19 trillion, up 1.04% in 24 hours, per data recorded at 9:25 p.m. EDT.
- 3Nearly $200 million in positions were liquidated, with short sellers bearing the heaviest losses according to Coinglass.
- 4Bitcoin’s open interest increased 2.25%, signaling new capital entering the market.
- 5The Crypto Fear & Greed Index remained at "Extreme Fear" despite the price bounce.
- 6Wall Street stocks rallied sharply: Dow +614 points, S&P +1.7%, Nasdaq +2.8%, led by Microsoft’s +15% post-earnings surge.
Bearish traders caught in short squeeze
Who's Affected
Analysis
Thursday's market action delivered a textbook example of risk-on correlation. As the Dow surged 614 points and the Nasdaq jumped 2.8%, digital assets followed suit, with Bitcoin reclaiming the $65,000 handle. For investors navigating an environment where Federal Reserve policy and mega-cap tech earnings drive sentiment, the interplay between stocks and crypto has never been more pronounced. The $200 million in crypto liquidations—dominated by short positions—underscores the danger of fighting the tape when macro catalysts swing sentiment.
The cryptocurrency market snapped back sharply on Thursday, erasing the losses sparked by a Federal Reserve-driven sell-off just 24 hours earlier. Bitcoin pushed above the psychologically important $65,000 level, trading at $65,112.78 as of late evening in New York, a gain of 2.16% over the prior day. Ethereum, while still grappling with bearish resistance near $1,930, managed a 1.31% rise to $1,929.21. Other major tokens also climbed: XRP added 1.48% to $1.08, Solana advanced 2.05% to $75.02, and Dogecoin inched up 0.72% to $0.07079. The total cryptocurrency market cap rose by 1.04% to $2.19 trillion, reflecting broad-based but uneven buying.
Other major tokens also climbed: XRP added 1.48% to $1.08, Solana advanced 2.05% to $75.02, and Dogecoin inched up 0.72% to $0.07079.
The recovery played out alongside a powerful rally on Wall Street. The Dow Jones Industrial Average surged 613.92 points, or 1.2%, to 52,208.06, while the S&P 500 climbed 1.7% to 7,437.63. The tech-heavy Nasdaq Composite was the standout performer, leaping 2.8% to 25,122.18, powered by Microsoft's post-earnings surge of over 15%. The software giant's better-than-expected quarterly report reignited risk appetite, pulling cryptocurrencies higher in its wake. Crypto-related equities also benefited: Strategy Inc. (MSTR) shares rose 4.73% and Bitmine Immersion Technologies (BMNR) closed up 2.18%.
The previous day's sell-off had been triggered by the Federal Reserve's policy announcement, which spooked markets with its hawkish tone, pushing Bitcoin briefly toward $60,000—a level that a prominent analyst described as not to be feared. "Don't fear BTC dropping to $60,000," the analyst was quoted as saying, suggesting the consolidation could be healthy for longer-term price structure. Despite the bounce, market sentiment remained fragile. The Crypto Fear & Greed Index clung to "Extreme Fear" territory, highlighting the lingering unease among traders.
Liquidation data from Coinglass revealed that nearly $200 million in positions were wiped out over the past 24 hours, with bearish short sellers bearing the brunt of the squeeze. This suggests that over-leveraged traders betting on further declines were caught off guard by the swift reversal. Bitcoin's open interest rose by 2.25%, indicating that new money was entering the market as spot prices climbed, and the overall balance between buy and sell orders pointed to an equilibrium—neither bulls nor bears had a decisive advantage.
What to Watch
The recovery raises the question of whether the crypto market has decoupled from Fed-driven macro headwinds or merely experienced a dead-cat bounce. The correlation with equities, particularly tech stocks, remains strong, and the robust earnings from Microsoft underscore the resilience of the innovation sector, which often supports crypto sentiment. However, the persistence of "Extreme Fear" and the liquidation event suggest that leverage is still being flushed out, and near-term volatility is likely. Investors and traders should watch key support levels: $60,000 for Bitcoin and $1,900 for Ethereum. A sustained break above $2,000 for ETH could signal the next leg up, while a failure to hold those levels might validate the analyst's cautious optimism about a dip to $60,000 being a buying opportunity rather than a crash.
Looking ahead, the market’s ability to absorb selling pressure at these levels will be crucial. With the CLARITY Act’s odds dropping to 37% according to a JPMorgan note, regulatory uncertainty continues to weigh on institutional participation. Yet, the bounce-back in both stocks and crypto indicates that dip-buyers remain active. For now, the crypto market is in a delicate balance, poised between a potential breakout fueled by strong tech earnings and the overhang of macro tightening.
Cite This Page
"Crypto Recovery Sees $200M Liquidated as Bitcoin Reclaims $65K, Stocks Rally." Finance Intelligence Brief, July 31, 2026. https://getfinancebrief.com/story/crypto-recovery-btc-65k-stocks-rally
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