Summary
- Bitcoin is currently priced near $63,000, down about 2% for the day and nearly 47% lower than its October peak, as investors shy away from riskier assets.
- According to Glassnode, over 65% of Bitcoin flowing into exchanges comes from long-term holders liquidating their positions at a loss, resembling patterns seen during previous bear markets.
- Experts informed Decrypt that this sell-off indicates a decrease in overall risk appetite and the exit of older holders, though they contend that leverage is not overly crowded and the potential downside could be limited.
Bitcoin is testing the $63,000 mark, pressured by a general retreat from risk assets and ongoing selling by long-term holders who are cashing out at losses.
On Friday, Bitcoin was trading at approximately $63,020, reflecting a 1.7% decline for the day and sitting 50% below its record high of $126,080 reached in October, according to data from CoinGecko.
The cryptocurrency struggled to maintain the $65,000 threshold on Wednesday, hitting an intraday low of $62,640. This drop breached a significant "Put Wall" at $64,500, which had provided short-term support due to options expiry, as noted by Tim Sun, senior researcher at Hashkey, in comments to Decrypt.
Market Dynamics Shift
Sun commented that risk appetite in broader markets has "significantly cooled," with global stock corrections and a rapid deleveraging in semiconductor and AI sectors. This pressure is not only affecting crypto sentiment but is also reducing institutional exposure to Bitcoin. Nevertheless, the derivatives market indicates "no crowding in leverage," with the main selling activity occurring in spot trading.
Daniela Hathorn, a senior market analyst at Capital.com, interpreted the decline similarly, characterizing it as a "wider risk aversion" rather than a decline in crypto-specific fundamentals. She noted that Bitcoin has become "increasingly sensitive to macroeconomic factors," with expectations regarding interest rates, geopolitical uncertainty, and changing sentiment influencing its short-term movements. While the recent price actions appear negative, she believes the overall context is less bearish than the headlines imply.
Long-Term Holders Drive Sales
The primary source of selling pressure stems from long-term owners. More than 65% of Bitcoin entering exchanges comes from long-term holders realizing losses, as reported by Glassnode. This trend mirrors earlier bear markets, where this group "dominated the sell side before eventually exhausting their selling," the firm noted. Until this proportion decreases, the persistent selling pressure from those who bought at the cycle's peak continues to dominate exchange flows.
Sun observed a similar situation on-chain, stating that investors holding for one to two years are "gradually accepting losses and exiting," which has hindered recovery efforts, particularly following an optimistic U.S. inflation report.
To gauge the extent of long-term holders' influence on selling, we can analyze specific exchange flows.
The Relative LTH/STH Realized P&L to Exchanges illustrates what portion of the coins moving into exchanges are at a profit or loss and which group is responsible for it. Currently,… https://t.co/1ZeklOStoc pic.twitter.com/r263SNxk8M
— glassnode (@glassnode) July 16, 2026
ETF Demand Lags Behind
A tentative resurgence in ETF purchases has not yet stabilized Bitcoin's price. Following a $425 million outflow on Monday, U.S. spot Bitcoin ETFs recorded inflows of $181 million on Tuesday and $108 million on Wednesday, as per Farside Investors. This "marginal recovery" has not been sufficient to boost the market, according to Sun. Since their launch in 2024, these funds have attracted approximately $51 billion.
Hathorn views this uptick more positively, suggesting that the return of inflows after a period of outflows indicates that "longer-term investors are gradually returning to the market," which she sees as an early sign of recovering institutional demand.
Both Sun and Glassnode have pointed out early indications that the most intense selling may be nearing its conclusion. Sun observed that the "liquidation intensity of long-term holders may have started to peak," with on-chain realized losses beginning to fall. Glassnode referenced analyst CryptoVizart's perspective that bear markets seldom establish "durable footing" until one-to-two-year holders have exhausted their selling.
In the absence of significant external shocks, Sun believes the decline may be limited, as decreasing selling pressure combined with a lack of crowded leverage sets the stage for a "choppy bottom" for Bitcoin. For now, the coins entering exchanges continue to predominantly come from investors who bought near the peak, and until this trend subsides, Glassnode contends, they will remain a significant influence in the market.