NEW YORK, July 2 -- The bounce arrived fast and left questions. Within hours of hitting a 21-month low of $57,737 on Tuesday, roughly $1.6 billion in leveraged short positions were forced to cover as the market snapped higher. By Wednesday afternoon, the largest cryptocurrency had reclaimed $61,000. Softer US jobs data provided the macro justification. The derivatives market was not as easily satisfied.

For traders tracking Bitcoin through the wreckage of its worst quarter since 2022, the move carried the signature of a mechanical bounce rather than a durable turn. The market that gained ground on Wednesday was the same market that recorded $4.5 billion in ETF outflows in June, the largest monthly net exit since spot Bitcoin funds launch...