Bitcoin and Ether's Bullish Rebound: Opportunity in the Ashes of Liquidation

The $800 million Bitcoin and Ethereum liquidation event of late June 2025, triggered by the Trump-Musk feud, has created a rare confluence of technical and fundamental catalysts for a potential rebound. As overleveraged bears exit the market and institutional sentiment stabilizes, the stage is set for a recovery at critical support levels. Here's why investors should consider deploying capital now.

The Anatomy of the Liquidation Event

The feud between Elon Musk and Donald Trump sent shockwaves through crypto markets, with Bitcoin dropping below $101,000 and Ethereum falling to $2,150—a 3.4% and 7.5% decline, respectively, within 24 hours. Liquidations surged to $988 million, with over $568 million wiped out in Bitcoin long positions alone. This wasn't just volatility—it was a forced deleveraging event, as overextended traders and speculators exited amid existential political and financial risks.

Yet, such extreme selling often precedes buying opportunities.

Technical Indicators: A Bullish Setup

Fibonacci Retracement Levels

The 38.2% Fibonacci retracement level for Bitcoin sits at $95,000, while Ethereum's 38.2% level is $2,240. These act as critical support points. If prices hold above these levels, a rebound to the 50% retracement ($97,500 for BTC, $2,325 for ETH) becomes likely. A break above the June 5 high ($105,000 for BTC) would signal a resumption of the upward trend.

Bollinger Band Rebounds

Bitcoin's price has rebounded off the lower Bollinger Band (calculated at 20-period standard deviation) on three occasions since 2020, with average gains of 12% within two weeks. Ethereum shows a similar pattern. Current positioning suggests a bounce is overdue.

Volume and On-Chain Activity

Despite the sell-off, Bitcoin's on-chain data reveals resilience:
- New Wallets: Over 556,000 new Bitcoin wallets were created in 24 hours (June 7–8), signaling organic retail demand.
- Open Interest: Deribit's Bitcoin futures open interest remains above $10 billion, suggesting institutional conviction.
- Network Usage: Ethereum's gas fees held steady at $30+, indicating ongoing transactional activity.

Institutional Flows: A Contrarian Signal

While Bitcoin ETFs saw $278 million in outflows in late June, Ethereum ETFs recorded $11.3 million in inflows—a divergence hinting at strategic buying. Institutions often step in during crises, as seen in 2020's Bitcoin crash and Ethereum's 2022 bear market.

Market Sentiment: Fear as a Buying Catalyst

The Crypto Fear & Greed Index plummeted to 45 (“Fear”)—a level last seen during the 2022 bear market, which preceded a 200% BTC rally. Short-term panic often overshadows long-term fundamentals, such as Bitcoin's $1.3 trillion market cap and Ethereum's role in decentralized finance (DeFi).

Investment Strategy: Buy the Dip, Validate the Bounce

1. Entry Points:
2. Bitcoin: Buy on dips below $100,000, targeting $105,000 initially. A breach of $95,000 would invalidate the bullish case.
3. Ethereum: Accumulate between $2,200–$2,300, with a first target of $2,400.

4. Use stop-losses at the 61.8% Fibonacci retracement ($92,000 for BTC, $2,140 for ETH).

5. Validation Signals:

6. A close above Bitcoin's 50-day moving average ($102,500).
7. Ethereum's RSI breaking out of oversold territory (below 30).

8. A sustained Bitcoin dominance index above 40%, signaling broader crypto health.

9. Risks:

10. A prolonged feud or Trump-Musk policy clashes could reignite selling.
11. If Bitcoin breaks below $95,000, a deeper correction to $85,000 becomes possible.

Conclusion: The Ashes of Liquidation

The $800 million liquidation has cleared speculative excess, leaving a cleaner price base for institutional buyers. Technical indicators, on-chain data, and historical precedent all align for a rebound. This isn't just a recovery—it's a chance to own Bitcoin and Ethereum at multiyear valuations before the next cycle's upswing.

Recommendation: Deploy 5–10% of a risk budget into Bitcoin and Ethereum futures/ETFs at current levels, with a focus on scaling into dips. Monitor the feud's resolution and macroeconomic data for further catalysts.

The crypto market is rarely more rewarding than when fear peaks and technicals align. This is one of those moments.