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 its history. Long-term investors are actively realizing losses — they account for 43% of the total realized volume on the network, with daily losses for this category of participants amounting to about $280 million. In my assessment, this scale of capitulation is a historic signal that typically precedes the formation of a price bottom.
Outflows from ETFs and macroeconomic pressure
Meanwhile, outflows from U.S. spot Bitcoin ETFs continue. On July 8, net withdrawals totaled $84.86 million, and trading volumes in the sector fell by 80% compared to peak levels from last fall. However, the Ethereum ETF segment has seen capital inflows for the fifth consecutive day, indicating a shift in institutional investor preferences.
QCP Capital experts note 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, creating additional pressure on risk assets, including cryptocurrencies.
Conditions for a reversal
From an on-chain analysis perspective, conditions for a trend reversal have already formed at the level of blockchain and derivatives data. However, for Bitcoin to confirm growth, it needs to consolidate above the $76,600 mark, and selling by large players must decrease. Recall that on July 7, analysts pointed to the risk of the first cryptocurrency falling below $58,000, and on July 8, the price dropped to ~$61,700 amid geopolitical events.
My professional opinion: The capitulation of long-term holders and record losses are a classic sign that the market is being cleansed of weak hands. However, without macroeconomic support and a clear breakout above the $76,600 level, it is too early to talk about a full-fledged reversal. Investors should closely monitor whale selling volumes and the Fed's actions in the coming weeks.