The first cryptocurrency has been trading below the average market price and the cost basis of short-term holders for five months. This is one of the longest periods of "deep undervaluation" of the asset in history. Currently, the price of Bitcoin is in a zone where long-term investors are actively realizing losses: they account for 43% of the total realized volume on the network, and the daily losses of this category of participants reach about $280 million — the highest since December 2022. This dynamic is classified as capitulation, which, in my experience, often precedes the formation of a price bottom.
At the same time, outflows from U.S. spot Bitcoin ETFs continue. On July 8, net withdrawals amounted to $84.86 million. Trading volumes in the sector have dropped by 80% compared to the peak values of last fall. However, the Ethereum ETF segment has seen capital inflows for the fifth consecutive day, indicating a shift in investor interest.
Experts note that the market lacks a "monetary cushion." Weakness in the U.S. labor market and high inflation limit the Fed's ability to ease policy. Conditions for a trend reversal have already formed at the level of blockchain and derivatives data, but for Bitcoin to confirm growth, it needs to hold above the $76,600 mark, and selling by large players must decrease.
On July 7, analysts pointed to the risk of the first cryptocurrency falling below $58,000. On July 8, the price of digital gold dropped to ~$61,700 amid escalating geopolitical tensions between the U.S. and Iran.
My comment: The situation resembles the classic "capitulation — accumulation — reversal" cycle. However, for a confident entry into long positions, it is necessary to wait for confirmation of a breakout of key levels and a reduction in pressure from hodlers. While the market remains in limbo, geopolitics and macroeconomic data will play a decisive role.