Bitcoin Bottom Building? Analyst Says Holder Capitulation Signals Bear Market Endgame

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.

Bitcoin traded below $63,000 on Thursday, bouncing 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.

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. Each attempted recovery has been met with fresh distribution from this cohort, explaining why price has struggled to reclaim the upper end of its range.

The Entity-Adjusted Long-Term Holder Realized Loss metric has not yet cooled from its recent peak, unlike the first major capitulation spike earlier in the cycle. 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

The 30-day average of spot bitcoin ETF 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. 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. Spot ether 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 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 further positive sessions are needed to confirm a durable recovery.

Derivatives book turns cautiously long

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.

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. Bitcoin currently trades roughly 6% below its aggregate maximum pain level of $66,000.

Iran ceasefire collapse whipsaws risk assets

WTI crude rose 7.9% over the past seven days after reports that the U.S.-Iran memorandum of understanding had lapsed. President Trump said 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. 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.

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 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.

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. 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.