Analysis: Bitcoin may be entering a phased bottom-building window; Strategy’s sell-off did not trigger panic

According to the latest Bitfinex Alpha report, Strategy recently conducted its first large-scale Bitcoin sale, yet the market demonstrated strong resilience without any significant selling pressure. After dropping to a cycle low of $57,803 on July 1, Bitcoin began to rebound, and the trajectory for July has remained positive so far. This aligns with the view expressed in Bitfinex Alpha’s previous Issue 212 report, suggesting that the market may see a recovery this month.

Data indicates that Strategy may have executed BTC sales between June 29 and July 2, but during this same period, Bitcoin’s weekly price increase remained positive, rising approximately 10.5% from the cycle low. Additionally, on the last trading day of the previous week and the first trading day of this week, Bitcoin spot ETFs recorded consecutive daily inflows exceeding $200 million, ending a streak of 10 consecutive trading days of net outflows, which cumulatively totaled $2.73 billion.

June was a tough month for Bitcoin ETF capital flows. On a weekly basis, ETF net outflows persisted for nine consecutive weeks, with net redemptions in June alone reaching nearly $4.06 billion. However, these redemptions mainly reflect Authorized Participants (APs) returning ETF shares and a decline in passive fund demand, rather than large amounts of Bitcoin being immediately sold on-chain. At present, the market cannot fully determine whether investors have digested the recent changes in capital flows, but spot trading volumes have not fully reflected the impact of the earlier large-scale outflows. With shifts in ETF asset allocations and capital flows turning positive again, new variables may emerge in the Bitcoin market in July. Following a brief dip after the news of Strategy’s sale, Bitcoin’s price quickly stabilized, now returning to the lower range of the first-quarter trading zone and surpassing levels seen before the announcement. ETF flows have recorded net inflows for three consecutive trading days, with the $61,000 level emerging as a key battleground for market bulls and bears.

Currently, Bitcoin remains in a downtrend over higher timeframes, but the market structure is undergoing changes. Approximately 10.83 million BTC are now in an unrealized loss, while about 9.22 million BTC remain profitable. For the first time, the number of coins in loss exceeds those in profit. Historically, this phase typically indicates significant pressure on spot holders and often coincides with the formation of a bear market bottom. However, a true macro bottom still requires confirmation from key indicators, such as Bitcoin consistently reclaiming the current "True Market Mean" level of around $71,500.

While the current market environment dampens sentiment in the short term, it also creates conditions for long-term capital to absorb selling pressure. As long-term holders and some whales begin to re-accumulate, Bitcoin is transitioning from low-conviction holders to higher-conviction investors. The next two to three months may become an important window for confirming a phased bottom.