Bitcoin and Ether Rally as Fear Eases and Spot ETF Demand Returns

Bitcoin's (BTC) and Ether's price surge on July 3 highlights how quickly market sentiment can shift. After trading near a 21-month low, BTC rallied toward the $63,000 area, while Ether outpaced the broader complex to push toward $1,775. This move came despite a still-dark sentiment backdrop, with the Crypto Fear & Greed Index registering 'Extreme Fear' at 11 out of 100.

The disconnect between an index signaling near-panic and price action turning constructive became more interesting after data showed a notable change in US spot Bitcoin ETF flows. According to SoSoValue, July 2 saw net inflows of $221.7 million into US spot Bitcoin ETFs, their largest single-day inflow since early May.

Derivatives indicators, such as positive funding for eight straight days and rising open interest, suggest leverage is building even as price has not fully trended. Near-term levels to watch include BTC holding around $61,000 and potential follow-through above $62,500 during thinner holiday-weekend trading.