Surface Pressure, Underlying Accumulation – Is Bitcoin in the Early Stages of Bottoming Out?

Original Author: Glassnode

Original Translation: AididiaoJP, Foresight News

Bitcoin's price has fallen below the $60,000 mark, with persistent institutional outflows and defensive positioning in the options market weighing on sentiment. However, beneath the surface, long-term holders and patient buyers are beginning to gradually absorb sell-side pressure, hinting that a bottoming process may have quietly begun.

Key Takeaways

• Long-term holders have returned to accumulation mode, with experienced investors once again absorbing coins during this market correction.
• Broad-based accumulation is evident across multiple wallet cohorts, as investors show growing confidence amid price weakness.
• The number of Bitcoins currently in a loss exceeds those in profit, reflecting widespread investor stress and a migration of coins towards more committed holders.
• U.S. spot Bitcoin ETFs continue to see net outflows, with the institutional de-risking trend persisting.
• The Coinbase order book is notably skewed towards bids, with institutions patiently providing liquidity and building support below the market.
• Leveraged traders have significantly increased their long positions, risking either a sharp rebound or a fresh wave of long liquidations.
• Market makers' gamma positioning is becoming increasingly favorable, with hedging flows likely to dampen volatility and promote price stability.
• Options traders are paying a premium for downside protection, highlighting a clear defensive market stance and strong hedging demand.
• Implied volatility is rising, suggesting Bitcoin is entering a bottoming phase, though it does not rule out one final fear-driven volatility spike.

Macro Outlook

The Federal Reserve held rates steady for the fourth consecutive time at its June meeting, but the real market impact came not from the decision itself, but from the tone. New Fed Chair Kevin Warsh adopted a distinctly hawkish stance. With inflation stubbornly above target and tariff pass-through continuing to push up consumer prices, the market has largely priced out expectations for rate cuts this year. Any easing is not anticipated until at least 2027. Treasury yields have crept back towards 2026 highs, the dollar has strengthened, and while the labor market is still adding jobs, signs of narrowing breadth are emerging. Financial conditions are not loose, and near-term catalysts for improvement are lacking.

Bitcoin has been a primary casualty of this repricing. After a strong first quarter, June witnessed the most significant institutional retreat since spot ETFs were launched: the persistent redemption wave appears more driven by rational profit-taking than panic selling, as many institutional positions were built at levels far below current prices. The selling pressure is orderly but relentless, pushing Bitcoin's price back into a range that resets short-term expectations. Entering the third quarter, the key question is whether the macro environment can stabilize to restore risk appetite, or if sticky inflation and a strong dollar will continue to weigh on the most liquidity-sensitive asset.

On-Chain Insights

Long-Term Holders Return to Accumulation

Long-term holders are rebuilding positions after an extended period of distribution, with their net position change firmly turning positive. While the accumulation rate is still modest compared to the aggressive buying seen during previous bull market expansions, this marks a significant behavioral shift – Bitcoin's most conviction-driven investor group is once again absorbing coins.

This shift occurs as Bitcoin corrects back towards $60,000, suggesting experienced holders view the recent pullback as an opportunity rather than a reason to reduce exposure. Historically, a sustained transition from net distribution to accumulation often emerges during market weakness, as long-term investors gradually add while short-term participants de-risk. Although it's too early to declare a full-blown accumulation phase, the return of persistent long-term buying is a positive signal: conviction is being quietly rebuilt beneath the surface.

Broad-Based Accumulation Evident

Bitcoin's Accumulation Trend Score has risen significantly over the past month, with buying activity becoming increasingly widespread across investor cohorts. Following months of persistent distribution during the market decline, most wallet groups have now shifted to accumulation, indicating that the recent correction is starting to attract new demand.

The strongest accumulation is currently seen among smaller holders (less than 1 BTC) and entities holding 100-1000 BTC, both with trend scores near maximum levels. Simultaneously, larger groups, including wallets with 1000-10000 BTC, have also turned to net buying, though with less intensity than earlier in the cycle. This synchronized improvement across multiple investor cohorts suggests that confidence is being rebuilt after the pullback, with market participants increasingly willing to absorb selling pressure near current prices. Historically, when accumulation broadens across different wallet sizes, it often lays a constructive foundation for a market recovery, though confirmation through sustained buying is still needed.

Majority of Bitcoin in Loss

The recent sell-off has pushed the market past a significant psychological and structural milestone: the number of Bitcoins currently in a loss now exceeds those in profit. According to the latest data, approximately 10.83 million BTC are underwater, compared to around 9.22 million BTC in profit. This represents one of the most severe deteriorations in investor profitability since the start of this bull market, highlighting the extent of the recent repricing.

Historically, when loss-dominating supply exceeds profitable supply, it is often associated with high financial stress and widespread capitulation among newer market participants. While this dampens sentiment in the short term, it also creates conditions for stronger hands to absorb coins from weaker ones. Combined with the re-accumulation by long-term holders and other groups, this sharp decline in profitability suggests the market is entering a phase where coins are migrating towards higher-conviction investors.

Off-Chain Insights

ETF Outflows Accelerate

Institutional demand continues to deteriorate, with the 7-day moving average net outflow from U.S. spot ETFs pushing further into negative territory. After a brief回暖 in May, capital flows have reversed again, and persistent outflows have become the norm as Bitcoin heads towards $60,000. The sustained nature of redemptions indicates institutions remain in a defensive posture, choosing to reduce exposure rather than buy into weakness.

This stands in stark contrast to the strong ETF demand that previously fueled market rallies. While on-chain data shows re-accumulation by long-term holders and multiple other cohorts, ETF investors are not yet displaying the same conviction. This divergence highlights a market currently propped up by patient on-chain capital, while more price-sensitive institutional participants are still withdrawing liquidity. Stabilization in ETF flows will be a key signal to confirm a broader recovery in investor confidence.

Hyperliquid Leveraged Traders Strongly Bullish

Positions on Hyperliquid have largely turned bullish, with net long exposure steadily increasing even as Bitcoin's price continues to decline. Instead of reducing positions during weakness, leveraged traders are consistently adding to their bullish bets, pushing long preference to the highest level observed in the period.

This creates an increasingly asymmetric market structure. If buyers regain control, the large concentration of long positions could fuel a powerful short squeeze. However, as long as the price remains in a clear downtrend, the accumulation of leveraged longs also makes the market vulnerable to a further downside shock if support levels fail. In such an event, forced liquidations of overextended longs would amplify volatility and accelerate the decline. The data currently suggests derivatives traders are positioning for a reversal, but this conviction awaits price confirmation.

Options Market Maker Positioning Conducive to Volatility Dampening

The Deribit GEX heatmap reveals that the options market is currently dominated by positive gamma positioning near the current price. A significant cluster of positive gamma has formed around the low $60,000s. When market makers are in a positive gamma state, they typically hedge by buying into weakness and selling into strength, a dynamic that naturally dampens volatility and encourages price stability near the strike price with the highest open interest.

This implies that, despite the recent sell-off, the options market is no longer preparing for an accelerated decline. Instead, market maker hedging flows are increasingly acting as a source of liquidity, helping to absorb directional volatility and reducing the likelihood of disorderly price action. This doesn't necessarily signal an imminent reversal, but suggests the market is transitioning from a highly unstable state during the decline. Unless a major macro catalyst forces the price away from this gamma-rich zone, options positioning points towards a period of consolidation and lower realized volatility, rather than a new wave of panic selling.

Options Traders Paying Premium for Downside Protection

The options market has turned defensive, with the 14-day put/call volume ratio surging above 1.0 to reach its highest level in the past year. This indicates that put option activity has surpassed call buying, reflecting traders prioritizing downside protection over upside participation as Bitcoin drops towards $60,000.

Historically, high put/call ratios occur during periods of heightened uncertainty, where investors either hedge spot exposure or express a bearish view. While this reinforces the cautious tone set by ETF flows and recent price action, excessive hedging demand can also serve as a contrarian signal. When a large number of participants have already positioned defensively, the market becomes less vulnerable to incremental selling pressure. For now, however, the options market still indicates that risk management, rather than betting on a recovery, remains the dominant priority.

Implied Volatility Rebounds

Bitcoin's implied volatility index (DVOL) has begun to recover from historically low levels following the recent sell-off, but remains well below the panic extremes typically seen during major market dislocations. This suggests options traders are starting to price in larger future price swings, with uncertainty rising, but expectations have not yet reached the levels of fear historically associated with durable lows.

Structurally, this resembles the early stages of a bottoming process more than its completion. Volatility begins to reprice as the market searches for a bottom, but previous cycle lows were often accompanied by a final volatility spike, driven by forced selling, liquidations, or macro shocks inducing capitulation. If such a spike materializes, it would likely be associated with indiscriminate selling and heightened stress in the derivatives market. Until then, the gradual increase in implied volatility indicates traders are bracing for larger moves, even if the final flush needed to establish a durable bottom has not yet occurred.

Summary

Bitcoin remains in a clear corrective phase, but beneath the weak price action, some important structural shifts are beginning to emerge. Long-term holders are accumulating again, buying activity is broadening across wallet cohorts, and Bitcoin spot order books (Binance and Coinbase) are increasingly skewed towards bids. These changes are typically associated with patient capital stepping in as weaker hands exit.

At the same time, caution is warranted. Institutional capital continues to flow out of U.S. spot ETFs, options traders are actively hedging downside risk, and leveraged long positions stand elevated, leaving the market susceptible to another round of liquidation-driven selling. Implied volatility also suggests the market may still need to undergo one final flush to establish a low.

Taken together, the data indicates Bitcoin is transitioning from a distribution phase to an accumulation phase, but confirmation is still required. While the foundation for a long-term recovery is gradually being laid, the market may first need to pass one final test of conviction before a sustainable uptrend can emerge.