Economic Observer reporter Lao Yingying

In early July, the price of Bitcoin fell below $58000 and returned to above $60000. In this context, Tina, a financial "worker" in Central, Hong Kong, bought 12000 USDT (Tether, a virtual currency pegged to the US dollar, hereinafter referred to as "U"). Investors usually exchange fiat currency for U before trading Bitcoin, and then use U to buy and sell Bitcoin.

After graduation, Tina has been working in the Web3.0 (decentralized third-generation Internet) industry in Hong Kong, and she has a good understanding of cryptocurrency investment. In the first half of this year, Tina bought Bitcoin in the range of $60000 to $78000 five times, but due to not being able to buy at a low level each time, her position has now shown a floating loss on paper and is in a "stuck" state.

On October 6, 2025, Bitcoin climbed to a historical peak of approximately $126200 and then sharply declined thereafter. In April 2026, the price of Bitcoin briefly dropped to around $65000. After entering May, Bitcoin rebounded strongly, briefly returning to $82800 in mid May, and then falling below the $80000 and $70000 levels in the following month. Since June, the price of Bitcoin has fallen below $60000, hitting a low of $58000 and reaching its lowest level since October 2024.

The reporter learned from the interview that Bitcoin is currently at a confusing point for investors: on the one hand, Bitcoin has retreated more than 50% from its historical high in October 2025, and has begun to fluctuate repeatedly in the range of $58000 to $63000; On the other hand, although some financial institutions and analysts have lowered their year-end target price for Bitcoin to below $100000, they still remain optimistic about the price for the year.

'Trapped'

Tina told the Economic Observer reporter that her investment philosophy is conservative. In 2025, she did not wait for Bitcoin to reach a high of about $120000 before selling, but gradually reduced her position when the Bitcoin price was at $100000 in January 2025. From February to April 2025, when the price of Bitcoin briefly dropped to $82000 to $83000, she gradually liquidated her holdings.

After reaching its peak in October 2025, the price of Bitcoin experienced a sharp decline. In February 2026, Tina believed that after a continuous decline, the price of Bitcoin had reached a relatively reasonable range. Therefore, she resumed her position at $78000 and bought 15000U. Unexpectedly, from March to April, the price of Bitcoin continued to decline and fluctuated within the price range of $65000 to $70000.

Regarding the reason for Bitcoin's recent decline, Zhao Wei, a senior researcher at OKX Research Institute, a cryptocurrency research institution, told Economic Observer reporters that it is the result of multiple factors resonating together. In terms of funds, the US spot Bitcoin ETF (exchange traded open-end index fund) has continued to experience net outflows since November 2025, and has shifted from a net buyer to a net seller in 2026. The net outflow in June even hit the worst performance since its listing; Previously, institutions that were important buying forces have also slowed down their increase in holdings, and the 13 week increase pace of Strategy (a virtual currency investment company) was interrupted at the end of March.

Zhao Wei stated that at the same time, geopolitical conflicts such as the situation in the Middle East have repeatedly disturbed global risk appetite, and the significant fluctuations in international oil prices have repeatedly become the trigger for the synchronous decline of related assets. As a highly volatile asset, Bitcoin is also difficult to escape unscathed. In addition, from the perspective of the cyclical pattern of the cryptocurrency market itself, the current round of decline in Bitcoin is roughly in line with the high point retracement rhythm of several cycles in history.

From March to April 2026, Tina purchased 13200U and 14000U at prices of approximately $66000 and $70000 respectively. In May, after Bitcoin surged to $80000, Tina did not reduce her position but continued to hold it. She felt that the high point of Bitcoin had not yet arrived, and then continued to increase her position by 13000U when the Bitcoin price fell back to $65000 in June.

From the end of June to early July, Bitcoin fluctuated repeatedly between $58000 and $63000. In Zhao Wei's view, this is essentially a tug of war between long and short sides in a critical position. The vicinity of $58000 is not only an important technical divide between long and short positions, but also close to the long-term moving average support, which is recognized by the market as a key defense line; But every time it rebounds above $60000, the spot trading volume often weakens synchronously, indicating that this round of rebound relies more on emotional repair rather than real buying support.

With the addition of her fifth position increase in early July, Tina's overall investment cost in Bitcoin this year remains around $70000. Due to the recent increase in Bitcoin volatility, compared to the current Bitcoin price, her book value is still floating losses. Regarding the future trend of Bitcoin, Zhao Wei stated that the current US stock market remains strong, and the overall preference of funds for risk assets is differentiated. Bitcoin also lacks a clear incremental catalyst in the short term, and whether it can break out of the oscillation zone still needs to observe the subsequent changes in macro liquidity and funding.

Liquidation

Tina started investing in cryptocurrency in 2019 and held approximately 16000 US dollars until August 2024, all while engaging in spot trading (referring to buying or selling Bitcoin at the actual price on the exchange). Bitcoin continued to rise after March 2024 and reached approximately $100000 in January 2025. At that time, Tina's position had risen to 100000U, and she began gradually reducing her holdings thereafter. Her funds are not large, but she is still satisfied with the investment returns. In her opinion, although spot trading has lower returns, the risks are also relatively low.

In addition to spot trading, there is also a type of contract trading in Bitcoin trading, which refers to traders buying or selling Bitcoin at the contract price on the exchange. Contract trading supports leveraged trading, where traders only need to pay a small margin to borrow more funds for trading. This also means that contract traders can achieve higher returns through leverage, but they also need to bear higher risks.

Another Hong Kong investor, Jason, hopes to achieve financial freedom through highly leveraged contract trading. Starting from January 2026, he began testing contract trading with an initial capital of 200U. At that time, due to the high price of Bitcoin in 2025, institutions generally held an optimistic attitude towards the prospects of Bitcoin in 2026. The price target for the end of 2026 was concentrated in the range of $150000 to $250000.

Jason felt at the time that despite the volatility and pullback of Bitcoin prices, there were still many opportunities for an upward trend in the future. At the beginning, he traded contracts with multiple orders at a leverage of 100 times. Although the leverage was high, the position was very low, only 3%. With caution and luck, Jason's position profit once exceeded 300%, but later his principal began to lose money due to fluctuations in the Bitcoin market.

Due to his increasing obsession with capital recovery, he began to frequently place heavy positions, counter trend orders, and constantly increase margin. Starting from mid to late June, Bitcoin experienced a unilateral decline, with a further drop of 5.4% on June 24th. This means that for contract investors, if they place a long order with 100 times leverage, as long as Bitcoin drops by 1%, their position will be liquidated. On that day, Jason's account funds were reset to zero overnight.

According to data from CoinGlass (a cryptocurrency contract data platform), from June 24th to June 25th, nearly 180000 people in the cryptocurrency industry liquidated their positions, with a total liquidation amount of 984 million US dollars, including 799 million US dollars in multiple liquidation orders.

A cryptocurrency insider told Economic Observer reporters that in recent times, the price of Bitcoin has experienced rapid corrections and rebounds, leading to widespread liquidation by both bulls and bears. According to CoinGlass's statistics, from July 4th to July 5th, a total of 65530 people worldwide liquidated their positions, with a total liquidation amount of $208 million.

Wait And See

Jason told reporters that he is now in a dilemma: should he continue to trade contracts by adding "bullets", wait for the buying opportunity to turn to spot trading, or simply exit the cryptocurrency circle?

Zhao Wei stated that there is still disagreement in the market regarding whether a bottom has formed. The bullish side believes that despite the deep decline in prices, institutional funds have shown a characteristic of buying at low prices. The current price is an important chip intensive area in the past two years and has approached the cost line of some "miners". In history, large-scale liquidation by miners often marks the approaching bottom of the cycle. However, some analysts suggest that based on the adjustment range and cycle length of previous bear markets, the market may still need more time to complete bottoming out, and there is a possibility that Bitcoin may temporarily drop to around $48000.

Ding Yuan, the director of Xinhuo Research Institute under Xinhuo Group (01611. HK), told Economic Observer reporters that in the Hong Kong stock market, high valuation artificial intelligence technology stocks that continued to make money in the first half of the year began to show obvious signs of correction. In sharp contrast, Bitcoin, which had previously performed poorly, has recently rebounded to some extent. He believes that this is a round of asset allocation restructuring led by institutional investors, and there are three core factors that will support the steady upward trend of the Bitcoin market in the future.

Firstly, the global macro liquidity environment is becoming more favorable, with the Federal Reserve confirming a decrease in inflation risk and major central banks globally synchronously adjusting monetary policies, providing a solid macro foundation for various risk assets in the market; Secondly, traditional finance is accelerating its embrace of the digital asset industry. Several listed companies in the global digital asset treasury have entered the relevant index constituent stocks, attracting a large amount of passive allocation funds. At the same time, more than 100 institutions such as Visa, Mastercard, and BlackRock have jointly launched new stablecoins; Thirdly, the expectation of Strategy selling Bitcoin reserves, which was previously a concern in the market, has been realized, the panic has dissipated, and investors have returned to the decentralized consensus.

Tina said that as she is currently in the stage of being "trapped", she will temporarily choose a wait-and-see attitude. In her opinion, there will be a "low point" for gold in the second half of the year, and she will consider increasing her position to over 80%.

Zhao Wei believes that for investors, instead of worrying about whether the bottom has been identified, it is better to pay more attention to marginal change signals and rationally view the possibility of price fluctuations in the short term. At the same time, he also suggests that investors should combine their own risk tolerance, maintain rationality and caution, fully evaluate the market environment and personal risk preferences, and avoid blindly following the trend.

(Author Lao Yingying)