Institutional outflows and spot selling pressure persist; could $54,000 become a potential bottom for Bitcoin?

Original Author: Glassnode

Original Compiled by: AididiaoJP, Foresight News

Bitcoin has fallen below $60,000, with realized losses, ETF outflows, and defensive options positioning continuing to weigh on market sentiment. Although signs of value discovery and selective accumulation are increasing, broad demand has yet to emerge.

Summary

• Bitcoin is currently trading at $62,300, a 19% discount to the True Market Mean Price of $77,000. The cost basis of short-term holders has dropped to $71,400, indicating new buyers are accumulating for the first time below the cycle's average price – a constructive early step towards bottom formation. (As of press time, Bitcoin had dropped to $60,800)
• The 90-day moving average of Net Realized Profit/Loss stands at -$205 million per day, confirming the market is deeply embedded in a loss-dominant environment, with gravity shifting towards the Realized Price of $53,400 rather than the True Market Mean Price.
• The dense supply cluster for short-term holders lies in the $66,800-$70,700 range, forming the most immediate overhead resistance. Short-term upside is limited until this zone is reclaimed, opening a path towards the short-term holder cost basis.
• Continued ETF outflows: Institutional demand remains weak, with GBTC accounting for the largest share of recent redemptions.
• Coinbase buyers returning: US investors show buying activity, while Binance traders remain defensive.
• Spot market dominates selling: Selling pressure originates from the spot market, with derivatives primarily following rather than driving.
• Implied volatility stabilizes near recent lows, while realized volatility remains elevated, keeping the Volatility Risk Premium negative.
• Downside protection demand rebuilds across tenors, skew rises sharply, although overall volatility pricing is relatively restrained.
• Recent flow shifts towards selling premium, while market maker positioning remains dominated by long gamma in the 60K-64K range, helping contain volatility near the current spot price.

Macro Insights

The US Dollar Index has reclaimed its 200-day moving average. On June 23, the DXY stood at 101.37, recovering significantly from 99.24 thirty days prior and crossing above its 200-day MA of 98.72 for the first time since the "Liberation Day" shock in April. The bullish sequence did not materialize.

The 10-year US Treasury yield holds at 4.50%, showing no signs of declining. The VIX rose from 16.2 mid-week to 19.49 at Friday's close – not a panic level, but a directional change worth noting. Equities have absorbed the spring correction, with the S&P 500 at 7,365 points, up 14% from the April low and holding above its own 200-day MA of 7,007.

Bitcoin has not participated in this recovery. BTC currently sits at $62,651, 18% below its 200-day MA of $76,466. The macro recovery remains an equity story, supported by resilient US corporate earnings. For Bitcoin, the renewed strength in the DXY is a dominant signal, and it is not bullish for BTC.

On-Chain Insights

Deep Discount Zone

Bitcoin's current price of $62,300 is far below the True Market Mean Price of $77,000. The True Market Mean Price represents the average cost basis of active non-miner investors and is a key threshold distinguishing bull and bear markets. The current 19% discount indicates prices are still deeply embedded in a structural bear market range.

Notably, the short-term holder cost basis has fallen to $71,400, reflecting significant accumulation by new buyers below the True Market Mean Price. From a cyclical perspective, this is a constructive development, marking a key step in bottom formation – new capital is deploying at prices increasingly decoupled from the overheated levels seen in recent cycles.

Supply accumulated during this bear market phase shows smaller unrealized losses compared to the broader cycle's hanging supply, suggesting greater resilience against further drawdowns. If a macro-driven decline occurs in the coming weeks, the Realized Price of $53,400 would serve as a reasonable lower bound for the short-to-medium-term bear market range.

Gravity Pulling Towards Lower Range

Having established the $53,400-$77,000 bear market range, the next question is which end the price is more likely to gravitate towards. The Net Realized Profit/Loss metric measures the net difference between realized profits and losses (in USD), effectively capturing whether dominant spending behavior is profit-taking or capitulation.

The 90-day moving average of this metric is currently -$205 million per day, confirming that loss realization has become the dominant force in the broader trend, suggesting the market's center of gravity still leans towards the lower end of the current range (near the Realized Price).

As this is a slow-moving average, this reading reflects a deeply embedded loss-dominant environment, not a single stress event. A recovery towards neutral levels (near zero) would be a strong signal that seller exhaustion is forming, indicating the onset of pre-bull market transition conditions.

Overhead Supply Caps Short-Term Moves

Beyond the broader negative capital flow environment, the local concentration of short-term holder supply above the current spot price further drags on prices. The most significant cluster lies in the $66,800-$70,700 range, representing coins accumulated recently that are now at a loss and likely to generate selling pressure on any attempted rally.

This zone effectively defines the most likely ceiling for short-term consolidation or relief rallies, as holders within this range tend to exit near their breakeven point when prices approach their purchase cost. A sustained reclaim above $66,800 would significantly alleviate overhead pressure and increase the probability of an extension towards the short-term holder cost basis of $71,400. Until then, this local hanging supply remains an active anchor suppressing upward momentum.

Off-Chain Insights

Continued ETF Outflows

Institutional demand remained under pressure this week, with the 7-day average net outflow for US spot ETFs approaching -$300 million per day, one of the most persistent capital withdrawal periods since the ETFs' launch. The magnitude and duration of outflows suggest traditional investors remain defensive despite Bitcoin trading near the lower end of its recent range (around $60,000-$65,000).

Notably, past corrections often attracted ETF buying, providing a crucial source of demand during weak periods. This time, sustained redemptions indicate many investors are choosing to reduce exposure rather than accumulate during the dip.

Despite the overall negative ETF outflows, the distribution of redemptions is not uniform. Grayscale's GBTC continues to account for the largest share of redemptions, with outflows exceeding 16,000 BTC over the past 90 days. This suggests weakness is primarily driven by legacy holder liquidation and portfolio rebalancing, rather than a unified retreat across the entire ETF sector.

Spot Buyers Beginning to Return

Spot market positioning is starting to improve after an extended period of aggressive selling pressure. While the overall spot CVD bias remains negative, the recent uptick shows that the intensity of net selling is easing, helping Bitcoin stabilize at the lower end of its trading range.

The most significant development is the divergence between exchanges. Coinbase's spot CVD bias has recovered significantly and turned positive, indicating buying activity on a platform typically associated with US institutional participants. In contrast, Binance remains in negative territory, suggesting overseas traders continue to maintain a defensive posture.

This behavioral divergence points towards an increasingly uneven market structure. Institutional investors appear to be absorbing supply during weakness, while speculative participants remain cautious. Although the broader spot market has not yet returned to sustained accumulation, the improvement in Coinbase demand suggests some investors already view current prices as attractive entry levels.

Futures Follow Spot Decline

On shorter timeframes, the retest of the low $60,000 region was a spot-driven move. Over the past ten days, spot CVD declined much faster than futures CVD. This divergence suggests aggressive selling pressure originated in spot venues, rather than leverage-driven liquidations. Open interest remained mostly subdued during this decline, and funding rates stubbornly stayed positive even as prices fell, indicating perpetual longs were reluctant to capitulate and the pressure was not stemming from derivatives books.

This situation has begun to change. As Bitcoin retested the lows, open interest surged significantly, and futures CVD has now turned negative alongside spot, indicating leverage participants are finally joining the move rather than fighting it. Meanwhile, funding rates have fallen from elevated levels, alleviating the long bias that was increasingly disconnected from price action.

Spot did the heavy lifting on the way down; derivatives are now following, not leading. If open interest continues to increase while futures CVD declines and funding rates soften, it would confirm that leverage is capitulating to the lows already sold off by the spot market – this broad participation often marks a more violent, and often more thorough, washout phase.

Implied Volatility Stabilizes After Recent Repricing

The options market has entered calmer territory following the sharp repricing triggered by Bitcoin's decline towards the June lows.

The front of the curve remains the most sensitive part. One-week ATM implied volatility briefly exceeded 42% during the latest sell-off before declining to around 37%. The one-month tenor fell from approximately 40% to 38%, while longer tenors remained relatively stable, with three-month and six-month implied volatility near 39% and 42%, respectively.

This stabilization occurs despite Bitcoin continuing to trade near the key 60K-63K support zone. The lack of sustained volatility buying suggests traders are no longer aggressively repricing risk, and much of the protection premium from the recent stress period has been removed.

With implied volatility returning to a stable range, the options market shows less urgency in pricing additional short-term uncertainty.

Volatility Risk Premium Remains Negative

With implied volatility stabilizing, the relationship between implied and realized volatility remains inverted, keeping the Volatility Risk Premium negative.

One-month implied volatility is currently around 38%, while realized volatility continues to climb to approximately 42%. Consequently, the Volatility Risk Premium remains negative by about 4 vol points, extending the inversion that began with the recent market sell-off.

The chart shows that even as implied volatility normalized from its early June peak, realized volatility remained elevated. In other words, the market is experiencing more actual volatility than options currently price. Although the gap has narrowed slightly from recent extremes, implied volatility has not yet rebuilt sufficient premium to bring the spread back into positive territory.

With realized volatility still exceeding implied volatility, the options market continues to price a calmer environment than recent price action suggests.

25 Delta Skew Rebuilds Across Tenors

Following the negative Volatility Risk Premium, the skew metric reveals how downside protection demand has evolved as Bitcoin trades near major support.

Skew is calculated as put option volatility minus call option volatility; a positive reading indicates puts trade at a premium to equivalent calls. Over the past week, this premium rose across the entire curve. One-week skew increased from approximately 12% to 24%, while the one-month tenor rose from around 14% to 23%. Three-month and six-month tenors also moved higher, reaching approximately 19% and 14%, respectively.

The chart shows a broad repricing of downside protection despite relatively stable implied volatility. Traders appear to be not paying more for volatility overall but increasingly willing to pay a premium for downside hedges.

The rebuilding of protection demand across tenors suggests that while volatility levels are stable, traders have renewed their preference for downside hedging.

Gamma Exposure Concentrated Near Current Spot

Beyond pricing and sentiment, gamma exposure helps identify the strike levels where market maker hedging is likely to have the most significant impact on market dynamics.

Recent flow shows traders becoming more comfortable selling premium. Over the past seven days, put selling accounted for the largest share of premium flow at 31.2%. This trend intensified over the past 24 hours, with put selling representing 47.2% of flow.

This shift is reflected in the gamma profile. The two largest positive gamma clusters are at 60K and 64K, with Bitcoin trading between them, around 62.8K. In positive gamma zones, market maker hedging tends to suppress volatility, helping contain the spot price within the range. In contrast, the nearest negative gamma exposure is at 65K, and its magnitude is significantly smaller than the positive gamma cluster at 64K.

Market maker positioning remains dominated by long gamma near current levels, creating conditions likely to contain volatility within the 60K-64K range.

Conclusion

Bitcoin continues to trade in a market defined by caution rather than conviction. On-chain metrics indicate the asset is at a deep discount to the average investor cost basis, while sustained loss realization confirms the bear market remains firmly entrenched. Concurrently, ETF outflows and defensive positioning in the options market highlight a broad lack of risk appetite among institutional and derivative participants.

However, beneath the surface, there are early signs of stabilization. Coinbase spot flows have turned constructive, the short-term holder cost basis is adjusting downward, and recent weakness has been primarily driven by spot sellers rather than excessive leverage. While these developments do not signal an imminent reversal, they are consistent with the early stages of a bottom formation process.

For now, the market remains caught in a tug-of-war between ongoing distribution and nascent value-driven demand, whose interplay will define Bitcoin's next major move.