'Bottom building in progress': Analysts say bitcoin holder capitulation signals late-stage bear market

Quick Take

• Bitcoin has spent five straight months below its True Market Mean and Short-Term Holder Cost Basis, with long-term holder loss realization hitting $280 million per day, the highest since December 2022, according to Glassnode.
• Spot bitcoin ETFs recorded $84.86 million in net outflows on July 8 even as bitcoin briefly rallied 9.4% intraweek before the U.S.-Iran ceasefire's collapse cut the gain to roughly 5%.

Bitcoin has traded below its True Market Mean and Short-Term Holder Cost Basis for five straight months, one of the longest deep-value stretches in its history, according to Glassnode's latest onchain report.

Long-term holder loss realization now accounts for 43% of total realized value onchain, up from 15% in early February, and recently peaked at $280 million per day, the highest reading since December 2022.

According to The Block's price page, bitcoin (BTC) traded below $63,000 on Thursday. The largest crypto asset has bounced between roughly $58,300 and $64,400 over the past week, still sitting well below the True Market Mean at $76,600 and the Short-Term Holder Cost Basis at $72,200, the metrics that Glassnode uses to define deep-value territory.

Long-term holders are the dominant sellers

Glassnode's onchain data identifies long-term holder capitulation as the single largest source of downward price pressure.

Investors who bought near the cycle top and held through months of drawdown are increasingly exiting as the bear market extends beyond their conviction threshold, the firm said.

Each attempted recovery has been met with fresh, and sometimes fierce, distribution from this cohort, which Glassnode said explains why price has struggled to reclaim the upper end of its current range.

The Entity-Adjusted Long-Term Holder Realized Loss metric, smoothed on a 30-day basis, has not yet cooled from its recent peak, unlike the first major capitulation spike earlier in the cycle, which was followed by a partial pullback.

Glassnode analysts said a sustained compression in this metric is the key precondition for a credible shift back toward bull market conditions.

ETF flows still bleeding, but decelerating

Institutional demand has not stabilized either.

The 30-day average of spot bitcoin exchange-traded funds net flows shifted into a monthly outflow regime in mid-May, peaked at negative $193 million per day in early June, and has since eased to roughly negative $89 million per day, according to Glassnode.

Daily ETF trading volume of $650 million to $950 million remains about 80% below the $4.4 billion peak recorded in October 2025.

Spot bitcoin ETFs recorded $84.86 million in net outflows on July 8, per SoSoValue data. Spot ether (ETH) ETFs, by contrast, posted $70.48 million in net inflows the same day, marking a fifth consecutive day of positive flows.

QCP Capital noted that bitcoin ETF flows had swung from a low of negative $691.7 million on June 25 to positive $223.5 million on July 2 and positive $265.7 million on July 6, led by IBIT, FBTC, and ARKB, though QCP said further positive sessions are needed to confirm a durable recovery.

Derivatives book turns cautiously long

Options positioning has shifted in the other direction, even as spot has remained under pressure.

The options open-interest put/call ratio fell to 0.56, its lowest reading of 2026, while perpetual funding has averaged well below the neutral 0.01% line, indicating a de-risked book leaning cautiously long rather than crowded into shorts.

It means that the options surface still prices in defensive risk.

The 25-delta skew, a measure of the premium traders pay for downside protection, spiked to 24% in late June, the most defensive reading since February's selloff, according to Glassnode.

Bitcoin currently trades roughly 6% below its aggregate maximum pain level of $66,000, a discount that has widened this week but remains short of the stress seen during February's selloff.

Iran ceasefire collapse whipsaws risk assets

The bottoming process collided with a fresh geopolitical shock this week. WTI crude rose 7.9% over the past seven days, with most of that move coming after reports that the U.S.-Iran memorandum of understanding had lapsed.

President Trump said Wednesday the ceasefire was "over" following Iranian strikes on commercial vessels in the Strait of Hormuz, and U.S. Central Command has since carried out two rounds of retaliatory strikes, hitting roughly 90 targets each on Wednesday and Thursday.

Iran responded with strikes on U.S. military sites in Bahrain and Kuwait.

Bitcoin, which had risen as much as 9.4% on the week, pared that gain to about 5% as the ceasefire deteriorated, trading in line with broader risk assets, with the S&P 500 and Euro Stoxx both turning negative, Glassnode said.

QCP Capital described the moment as one where monetary policy offers no cushion. June payrolls rose just 57,000, roughly half the 110,000 expected, and combined April and May revisions cut 74,000 jobs from prior estimates.

Even so, wage growth remains at 3.5%, and M2 hit a record $23.05 trillion in May, keeping inflation the binding constraint ahead of the July 14 CPI print.

QCP said the Strategic Petroleum Reserve has fallen to its lowest level since 1983, Strategy sold bitcoin for the first time to fund dividend payments, and private credit funds, including Blue Owl, Apollo, Blackstone, HPS, Morgan Stanley, and Ares, breached quarterly redemption gates in the second quarter.

"With no monetary cushion coming and buffers thinning across oil, crypto, and credit, where does the first crack show?" the QCP analysts asked.

Capital.com's Kyle Rodda argued that the escalation carries fundamental and risk-premium consequences, tied to Iran's effort to assert control over transit through the Strait of Hormuz and the U.S. Treasury's decision to revoke its waiver on Iranian oil sales.

Markets have priced in an implied probability of about 87% for a Federal Reserve rate hike this year, Rodda said, after the front end of the Treasury curve posted its largest one-day jump in months.

Technical levels in focus

Capital.com's Daniela Hathorn said bitcoin's rebound from the low $60,000s remains a key technical zone, having acted as support during the recent selloff.

She identified the mid-$60,000s as the first resistance level to watch on the upside, followed by the prior swing highs near $70,000, while a break back below recent support would raise questions about whether the recovery is losing momentum.

Taken together, Glassnode said the conditions for a bottoming process are in place across onchain, offchain and derivatives data, but confirmation has not arrived.

The firm said further cooling in long-term holder capitulation, stabilization in institutional flows, and a sustained reclaim of the True Market Mean remain preconditions before the odds of a regime shift can be weighted constructively.