Bitcoin Market Bottom Forming? Glassnode Analysis Shows Selling Pressure Easing

Signs of a Bottoming Process

Bitcoin's recent recovery may mark the early stages of a bottoming process as macroeconomic data continues to boost investor confidence, according to a Glassnode report published on Wednesday. The world's largest cryptocurrency has demonstrated remarkable resilience, outperforming both US and European equities following the release of softer US Consumer Price Index (CPI) data.

The June CPI data showed a 0.4% decline, the largest monthly drop since April 2020. This unexpected cooling in inflation reduced immediate fears of aggressive Federal Reserve interest rate hikes, providing a significant tailwind for risk assets including cryptocurrencies. Bitcoin's price action following the release suggests that selling pressure is becoming exhausted while buyers are increasingly waiting for positive macro catalysts.

"That sensitivity is the tell," Glassnode wrote. "A market this eager to rally on one inflation print is a market where sellers are spent and buyers are waiting for a reason." This observation captures the essence of early bottoming behavior—heightened responsiveness to positive catalysts combined with depleted selling pressure.

Bitcoin Outperforms Traditional Markets

The on-chain analytics firm highlighted that Bitcoin continues to trade above the average on-chain cost basis of all investors, while remaining below the short-term holder (STH) cost basis near $69,000. This positioning suggests that long-term holders have largely stopped realizing profits, with recent outflows increasingly sold at a loss—reflecting signs of late-stage distribution rather than panic selling.

Glassnode's Accumulation Trend Score showed broad buying activity across both small and large wallet cohorts as Bitcoin traded near its recent lows. This accumulation has since moderated as prices stabilized, suggesting that new buyers are entering the market at current price levels. The accumulation data indicates that both retail and institutional participants view the recent lows as attractive entry points.

ETF Flows Show Improvement

Institutional flows have also reflected signs of improvement. US spot Bitcoin ETF redemptions slowed considerably from June's heavy outflows, suggesting that selling pressure is beginning to stabilize. Bitcoin funds netted $181 million in inflows on Tuesday, partially offsetting the day before's $424 million in outflows.

BlackRock's iShares Bitcoin Trust (IBIT) led the charge with $139 million in inflows on July 15, reflecting its dominant role in the crypto ETF space. While this represents a meaningful recovery, Glassnode cautioned that the inflows remain modest relative to the scale of June's outflows, suggesting that institutions are still exercising caution.

"Until inflows return and hold, this remains a market where institutions have stopped fleeing but not started buying," Glassnode wrote. This nuanced view suggests that while the worst of the institutional exodus may be over, sustained buying pressure will be necessary to confirm a durable recovery.

Derivatives Signal Reduced Bearish Positioning

In derivatives markets, traders have steadily shifted from bearish positioning. The options put-to-call ratio has fallen to its lowest level of the year, indicating reduced demand for downside protection. This shift suggests that market participants are becoming less concerned about immediate price declines.

Perpetual futures funding rates have also remained slightly positive, suggesting long positioning has yet to become crowded. Glassnode noted that while bearish bets are being removed, the recovery lacks strong spot market demand. "What the unwind has not produced is actual buying. Futures and options traders repositioning is not the same as money entering the spot market, and that absence is the clearest caveat on the whole recovery."

Implications for Mining Operations

For Bitcoin miners, the potential bottoming process has significant implications. Higher BTC prices improve mining economics, making previously marginal operations more profitable. The recent network difficulty adjustment—a 5% decrease on July 12 to 127.17 trillion—provides additional relief for miners struggling with reduced revenue.

At current BTC prices around $64,600 and with difficulty adjustment factored in, miners with efficient hardware and low electricity costs ($0.05/kWh or less) can still generate solid returns. However, older generation miners like the Antminer S19 series are approaching critical shutdown prices in higher-cost regions.

For enterprises considering new mining deployments or expanding existing operations, the current environment presents strategic opportunities. The combination of lower difficulty, stabilizing prices, and improving institutional sentiment creates a more favorable backdrop for capital deployment.

Key Levels to Watch

Traders and miners should monitor several key price levels. Immediate support sits near $62,500, representing both a psychological level and a technical support zone. Resistance is positioned around $68,000, with the short-term holder cost basis near $69,000 forming the next major hurdle.

Technical analysis remains limited due to insufficient OHLC bars for Bitcoin, making traditional chart-based signals less reliable. Instead, fundamental and macro factors—including upcoming CPI releases, Federal Reserve policy decisions, and geopolitical developments—will likely play a larger role in shaping near-term price action.

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This article is provided for informational purposes only and does not constitute investment advice. Always conduct your own research before making any financial decisions.