Analysis: Bitcoin May Enter a Phase of Bottoming Out, Selling Does Not Trigger Panic

Odaily Planet Daily reports that Bitfinex Alpha's latest report indicates that a large-scale sale of Bitcoin has recently taken place, but the market has shown strong resilience without significant selling pressure. After Bitcoin fell to a cycle low of $57,803 on July 1, it began to rebound, maintaining a positive trend in July, consistent with the views presented in the previous report (Issue 212) that the market may experience a recovery this month.

Data shows that BTC sales operations may have been executed between June 29 and July 2, yet the weekly price increase of Bitcoin during the same period remained positive, rising approximately 10.5% from the cycle low. Additionally, on the last trading day of last week and the first trading day of this week, Bitcoin spot ETFs recorded over $200 million in daily inflows, ending a previous streak of 10 consecutive trading days of net outflows, with a total outflow of $2.73 billion.

June was a challenging month for Bitcoin ETF fund outflows, with net outflows recorded for nine consecutive weeks, and nearly $4.06 billion in net redemptions for the month of June alone. However, these redemptions mainly reflect authorized participants (AP) returning ETF shares and a decrease in passive fund demand, and do not indicate that a large amount of Bitcoin is being sold immediately through the on-chain market. The market is currently unable to fully assess whether investors have digested the recent changes in fund flows, but spot trading volumes have not fully reflected the impact of the previous large-scale fund outflows. With changes in ETF asset allocation and a return to positive fund flows, the Bitcoin market may face new variables in July. After a brief drop following the sale announcement, BTC prices quickly stabilized, returning to the lower end of the trading range from the first quarter and remaining above pre-announcement levels. ETF fund flows have recorded net inflows for three consecutive trading days, with the $61,000 level becoming an important dividing line for market bullish and bearish forces.

Currently, Bitcoin is in a downtrend on a higher time frame, but the market structure is changing. Approximately 10.83 million BTC are in an unrealized loss state, while about 9.22 million BTC remain profitable, with the number of loss-making chips exceeding that of profitable chips for the first time. Historically, this phase usually represents a high-pressure situation for spot holders and often approaches the stage of forming a bear market bottom. However, the true macro bottom still requires confirmation from key indicators, such as Bitcoin consistently recovering the current "True Market Mean" of around $71,500.

Although the current market environment temporarily dampens sentiment, it also creates conditions for long-term capital to absorb selling pressure. As long-term holders and some whales begin to accumulate again, Bitcoin is shifting from low-confidence holders to higher-confidence investors, and the next 2 to 3 months may become an important window for confirming a phase bottom.