Bitcoin bottoming process advances as holders absorb 43% of losses

Bitcoin has spent five months below its key on-chain cost levels, a stretch Glassnode describes as deep-value territory that historically precedes cycle bottoms.

Bitcoin traded near $62,800 as of 05:50 UTC on July 9, recovering from a June low of $58,300, but remains 18% below the True Market Mean of $76,600.

"The market requires further cooling in capitulation pressure, stabilization in institutional flows, and ideally a sustained reclaim of the True Market Mean before the probability of a regime transition can be weighted constructively," Glassnode said in its Week 27 on-chain report.

Long-term holders now account for 43% of all realized losses, up from 15% in early February, with daily loss realization peaking at $280 million — the highest since December 2022. Spot Bitcoin ETFs shed $4.5 billion in June, their worst month since launching in January 2024, though average daily outflows have since slowed to $88.9 million from a June peak of $193 million.

The question is whether the current bounce has durable buying behind it or merely reflects an absence of sellers. Glassnode's framework requires three conditions for confirmation: a sustained cooldown in long-term holder loss realization, positive ETF flows beyond a few sessions, and a reclaim of $72,200 followed by $76,600. Until those conditions align, analysts at Stifel Financial see room for a deeper slide toward $38,000, while K33 Research argues the floor is already in near $60,000.

Long-Term Holder Capitulation Mirrors 2022 Pattern

The on-chain data shows a market in transition. More Bitcoin now sits at a loss than in profit for the first time in this drawdown — roughly 10.83 million BTC underwater against 9.22 million in profit, according to Glassnode. Long-term holders are simultaneously selling old, deeply underwater coins and accumulating new ones at current prices, a rotation that on-chain analysts describe as characteristic of bottoming processes.

The Entity-Adjusted Long-Term Holder Realized Loss indicator peaked at around $280 million in daily losses, marking the second major selling wave of this downturn. Unlike the first wave, this one has not yet shown meaningful signs of easing. In 2022, the final capitulation of older coins preceded the actual price low by several weeks, with the low forming only once that selling exhausted itself.

ETF Outflows Slow, But Institutional Activity Remains Depressed

Spot Bitcoin ETF outflows totaled $4.5 billion in June, with BlackRock's IBIT alone accounting for $3.55 billion of the redemptions, according to data compiled by The Block. Daily ETF trading volume has fallen to between $650 million and $950 million, roughly 80% below the $4.4 billion daily peak recorded in October 2025.

The pace of withdrawal has since dropped sharply. Average daily outflows peaked at $193 million in early June and have slowed to around $88.9 million per day, though outflows still exceed inflows. SoSoValue recorded renewed inflows beginning July 2, the first sustained positive prints since the outflow trend began in May.

Options data presents a mixed picture. The put/call ratio has fallen to 0.56, its lowest level of 2026, indicating that active demand for short exposure has largely dried up. Yet options traders continue to pay elevated prices for downside protection, and Bitcoin trades about 6% below the options market's $66,000 max pain level. That combination — a low ratio with expensive puts — tends to appear late in bear markets, after aggressive shorts have taken profit and before genuine risk appetite returns.

Where Analysts Place the Cycle Low

The forecast spread among institutional researchers remains unusually wide. Stifel Financial chief equity strategist Barry Bannister drew a trendline through every major Bitcoin crash bottom since 2010 and extended it to the current cycle, targeting $38,000 on the view that tighter Fed policy and Bitcoin's high correlation with the Nasdaq justify further downside. K33 Research head of research Vetle Lunde argues the floor is already in at $60,000, noting the 2025 bull market was less aggressive than prior cycles, making an 80%-plus collapse structurally unlikely. Other cycle analysts cluster their bottom timing around October 2026, which would match the roughly 12-month duration of the 2018 and 2022 bear markets measured from the October 2025 peak.

One seasonal detail works in the market's favor. July has historically been one of Bitcoin's strongest months, with average gains of about 7.5%, and the early-July combination of returning ETF inflows and softening spot selling gives that pattern something concrete to build on. Bitcoin gained about 20% in July 2018 and 17% in July 2022, both bear-market years, according to CryptoQuant. The next test arrives at $66,000, where options positioning concentrates. How price behaves around that level into the late-July expiries will show whether this bounce has buyers behind it or just an absence of sellers.

This article is for informational purposes only and does not constitute investment advice.