Analysis: Bitcoin may be entering a phased bottom-building window; Strategy's Bitcoin sale did not trigger panic

Bitfinex Alpha's latest report indicates that while Strategy recently conducted its first major Bitcoin sale, the market has shown strong resilience and did not experience significant selling pressure. Bitcoin rebounded after hitting a cycle low of $57,803 on July 1st. The price action in July has remained positive so far, aligning with the view presented in Bitfinex Alpha's previous report No. 212 that the market could see a recovery this month.

Data suggests Strategy may have executed BTC sales between June 29 and July 2. However, during this same period, Bitcoin's weekly price change was still 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 totaled $2.73 billion.

June was a difficult month for Bitcoin ETF flows, with net outflows persisting for nine consecutive weeks on a weekly basis. Net redemptions in June alone approached $4.06 billion. However, these redemptions primarily reflect Authorized Participants (APs) returning ETF shares and a decline in passive fund demand, and do not necessarily mean large amounts of Bitcoin are being immediately sold on-chain. It is currently difficult to determine whether investors have fully digested the recent flow changes, but spot trading volume has not fully reflected the impact of the previous large-scale outflows. With changes in ETF asset allocation and fund flows turning positive again, the Bitcoin market may face new variables in July. After a brief dip following the news of Strategy's sale, the BTC price quickly stabilized and has now returned to the lower end of the Q1 trading range, higher than the level before the announcement. ETF flows have recorded net inflows for three consecutive trading days, with the $61,000 level becoming a critical battleground for bulls and bears.

Bitcoin is currently in a downtrend on higher timeframes, but the market structure is changing. Approximately 10.83 million BTC are in an unrealized loss, while about 9.22 million BTC remain in profit. This marks the first time loss-making coins have outnumbered profitable coins. Historically, this phase typically indicates high pressure on spot holders and often coincides with the formation stage of a bear market bottom. However, a true macro bottom still requires confirmation from key indicators, such as Bitcoin's sustained recovery of the 'True Market Mean,' currently 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 shifting from low-conviction holders to higher-conviction investors. The next 2 to 3 months could become an important window for confirming a cyclical bottom.