The first cryptocurrency continues to trade in a deeply oversold zone. For five months now, the price of bitcoin has been below the average market cost and the cost basis of coins held by short-term speculators. This is one of the longest periods of asset "undervaluation" in its history, serving as a powerful signal for analysts tracking fundamental metrics.
Capitulation of "Old Blood"
A key indicator of the current market state is the behavior of long-term holders (LTH). They now account for 43% of all realized losses on the network — a record high since December 2022. This category of investors is losing about $280 million daily. In my analysis, this is classic capitulation, which historically precedes the formation of a price bottom. When the most resilient market participants start locking in losses, it often means that "weak hands" have already left the market, and selling pressure is drying up.
Institutional Outflows and Contrast in the ETH Market
Meanwhile, capital outflows from U.S. spot bitcoin ETFs continue. On July 8, net withdrawals amounted to $84.86 million. Trading volumes in this sector have dropped by 80% compared to peak levels from last fall, indicating a reduced appetite for risk among institutional players. However, the Ethereum ETF market shows the opposite picture: capital inflows have been recorded for the fifth consecutive day. This could point to a liquidity shift or suggest that investors see ETH as a more attractive entry point at current levels.
Macroeconomic Backdrop and Levels for a Reversal
Experts emphasize that the market lacks a "monetary cushion." Weakness in the U.S. labor market and high inflation limit the Federal Reserve's ability to ease policy, putting pressure on all risk assets, including cryptocurrencies.
According to blockchain analytics, conditions for a trend reversal have already formed at the level of on-chain and derivative metrics. However, to confirm a bullish scenario, bitcoin needs to consolidate above the key resistance level of $76,600, and selling by large players (whales) must significantly decrease.
It is worth noting that earlier, one analyst from CryptoQuant pointed to the risk of bitcoin falling below $58,000, and on July 8, the price already dropped to ~$61,700 amid the escalation of the geopolitical conflict between the U.S. and Iran.
My professional opinion: Capitulation by long-term holders is a classic sign that often precedes a reversal. However, under current macroeconomic conditions with high inflation and tight Fed policy, the market may need more time to consolidate. The key signal for entry will not be the price itself, but rather a sharp decline in realized losses and a resumption of inflows into ETFs.