Bitcoin capitulation cools as $69,000 resistance looms for BTC

Long-term Bitcoin holders are selling at the slowest pace in weeks, but the $69,000 level stands as the next test for any sustained recovery.

Bitcoin edged up 0.3% to $64,720 as on-chain data showed long-term holders reducing their loss realization, though the $69,000 resistance level — the aggregate cost basis of short-term holders — remains the key hurdle for a sustained breakout.

"When the 30-day moving average of realized losses by one-to-two-year holders cools and rolls over, it has often been among the clearest early signals that the heaviest distribution phase is behind the market," Cryptovizart, lead research analyst at Glassnode, said.

Glassnode's Entity-Adjusted Long-Term Holder Realized Loss metric peaked two weeks ago and has since declined, indicating that investors who bought near the $107,000 cycle top are capitulating at a slower pace. At the same time, short-term holders who accumulated near recent lows are realizing profits at more than $4 million per day, creating overhead supply that has capped the recovery. Bitcoin briefly pushed above $65,000 after softer-than-expected CPI and PPI data before slipping back, with the probability of a July rate hike falling to 10.2% from 24.6% a week earlier, according to CME FedWatch data.

The $69,000 level represents the aggregate cost basis for short-term holders, according to Glassnode, and coincides with Bitcoin's old all-time highs from the 2021 cycle. "The first meeting with that level will likely draw a strong reaction, because the people most inclined to sell are the ones about to be made whole," Glassnode said in its latest newsletter. A convincing reclaim would open the door to a move toward $70,000 to $75,000, while a rejection would keep Bitcoin range-bound.

The cooling of long-term holder selling marks a shift from earlier this year, when LTH realized losses dominated on-chain flows. Glassnode's Relative Long/Short-Term Holder Realized Profit and Loss metric shows the LTH share of total realized losses has stopped growing, meaning the supply that met every rally is no longer expanding.

The macro backdrop has also improved. June's CPI fell 0.4% month over month, the steepest decline since April 2020, bringing the annual rate to 3.5%. The PPI rose 5.5% year over year, below the 6.2% consensus. Traders responded by scaling back rate-hike expectations, with fed funds futures now pricing a 10.2% chance of a July increase, down from 24.6% a week ago.

Still, some analysts caution that the inflation data may be backward-looking. "The 3.5% CPI number was driven by a 10% drop in gasoline through June, and that move had already reversed before the report was published," Ryan Lee, chief analyst at crypto exchange Bitget, said. Jasper De Maere, OTC trader at Wintermute, noted that the Fear & Greed Index at 25 remains in "Extreme Fear" territory despite the rally.

On-chain flows show mixed signals. Wrapped Bitcoin saw 326 WBTC exit exchanges in a single day, the largest net outflow since June, suggesting investors are moving coins into DeFi protocols rather than selling. Meanwhile, CEX spot trading volumes rose 15.3% to $1.11 trillion in June, the first increase in five months, according to The Block.

The path forward hinges on whether Bitcoin can break above $69,000. A move above that level would target the $70,000 to $75,000 range, while failure to hold could lead to a retest of the $61,500 low from earlier this month.

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