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

Original author: Glassnode

Original translation: AididiaoJP, Foresight News

Bitcoin dropped below $60,000. Loss realization, ETF outflows, and defensive options positioning continue to weigh on market sentiment. While signs of value recognition 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 Short-Term Holder cost basis has fallen to $71,400, indicating that new buyers are accumulating below the cycle average price for the first time – a constructive early step towards bottom formation. (Note: As of publication, Bitcoin has fallen 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. The center of gravity tilts towards the Realized Price of $53,400, rather than the True Market Mean Price.
• The dense supply cluster of Short-Term Holders lies in the $66,800 - $70,700 range, forming the most immediate overhead resistance. Without reclaiming this area, which opens the path towards the Short-Term Holder cost basis, short-term upside remains limited.
• Persistent 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 maintain a defensive posture.
• Spot Market Dominates Selling: Selling pressure originates from the spot market; derivatives primarily follow rather than drive.
• Implied Volatility Stabilizes Near Recent Lows: While realized volatility remains elevated, the Volatility Risk Premium stays negative.
• Downside Protection Demand Rebuilds Across Tenors: Skew rises significantly, although overall volatility pricing is relatively restrained.
• Recent Flow Shifts to Selling Premiums: Market maker positioning remains dominated by long gamma in the 60K-64K range, helping to contain volatility near the current spot price.

Macro Insights

The US Dollar Index (DXY) has reclaimed its 200-day moving average. On June 23rd, the DXY stood at 101.37, a significant recovery from 99.24 thirty days prior. It has closed above its 200-day moving average 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 remains elevated at 4.50%, showing no signs of decline. The VIX rose from 16.2 mid-week to close at 19.49 on Friday. While not a panic level, the directional change is noteworthy. Equities have absorbed the spring pullback; the S&P 500 is at 7,365 points, up 14% from its April low and firmly above its 200-day moving average of 7,007.

Bitcoin has not participated in this recovery. BTC currently stands at $62,651, trading 18% below its 200-day moving average of $76,466. The macro recovery remains an equities story, underpinned by the resilience of US corporate earnings. For Bitcoin, the renewed strength in the DXY is a dominant signal and is unfavorable for BTC.

On-Chain Insights

Deep Discount Zone

Bitcoin's current price of $62,300 is significantly below the True Market Mean Price of $77,000. The True Market Mean Price is the average cost basis of active non-miner investors and a key threshold distinguishing bull and bear markets. The current 19% discount confirms prices remain deep in structural bear market territory.

Notably, the Short-Term Holder cost basis has fallen to $71,400, reflecting substantial 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 being deployed at prices increasingly decoupled from the overheated levels of the recent cycle.

Supply accumulated during this bear market phase has smaller losses relative to the wider cycle's hanging supply and is expected to show greater resilience to further pullbacks. If macro-driven downside occurs in the coming weeks, the Realized Price of $53,400 could act 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 indicator measures the net difference between realized profits and losses in the market (in USD), effectively capturing whether the dominant spending behavior is profit-taking or capitulation.

The 90-day moving average of this indicator is currently -$205 million per day, confirming that loss realization has become the dominant force in the broader trend. This suggests the market's center of gravity remains tilted towards the lower bound of the current range (near the Realized Price).

Since this is a slow-moving average, the reading reflects a deeply embedded loss-dominant environment rather than a single stress event. A recovery of this indicator to neutral levels (near zero) would be a strong signal that seller exhaustion is forming, and preconditions for a transition to a bull market are beginning to emerge.

Overhead Supply Limits Short-Term Moves

Beyond the broader negative capital flow environment, a local concentration of Short-Term Holder supply overhead further weighs on the price. The most significant cluster lies in the $66,800 - $70,700 range. This represents recently accumulated coins now in a loss position, likely to generate selling pressure on any attempt to rally.

This zone effectively defines the most likely ceiling for short-term consolidation or relief rallies, as holders within this range tend towards exiting near breakeven points when the price approaches their purchase cost. A sustained reclaim of prices 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

Persistent ETF Outflows

Institutional demand continued to face headwinds this week, with the 7-day average net outflow from US spot ETFs approaching -$300 million per day. This represents one of the most sustained periods of capital withdrawal since the ETF's launch. The scale and duration of the outflows suggest that traditional investors maintain a defensive posture, even with Bitcoin trading at the lower end of its recent range (~$60,000 - $65,000).

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

Despite the overall negative ETF flow, the distribution of redemptions is uneven. 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 liquidation from legacy holders 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 a prolonged period of aggressive selling pressure. While the overall spot CVD (Cumulative Volume Delta) remains negative, the recent bounce indicates 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, suggesting buying activity is returning on the platform typically associated with US institutional participants. Conversely, Binance remains in negative territory, implying that overseas traders continue to maintain a defensive posture.

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

Futures Following Spot Decline

On shorter timeframes, the test of the low $60,000 region was a spot-led move. Over the past ten days, spot CVD declined much faster than futures CVD. This divergence suggests aggressive selling pressure originated from 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 that perpetual longs were reluctant to capitulate and that pressure wasn't originating 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 in tandem with spot CVD. This indicates that leveraged participants are finally joining the move rather than fighting it. Simultaneously, funding rates have fallen from their highs, alleviating the bullish bias that had become increasingly disconnected from price action.

Spot carried the primary burden during the decline; derivatives are now following rather than leading. If open interest continues to increase alongside falling futures CVD and softening funding rates, it would confirm that leverage is capitulating to the lows that spot has already sold off to. This broad-based participation often marks a more violent and typically more complete phase of washing out.

Implied Volatility Stabilizes After Recent Repricing

The options market has entered a calmer period following the sharp repricing triggered by Bitcoin's fall towards the June lows.

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

This stabilization occurred even as Bitcoin continues to trade near the key support range of 60K-63K. The lack of sustained volatility buying indicates that traders are no longer aggressively repricing risk, and much of the protective premium from the recent stress period has been removed.

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

Volatility Risk Premium Remains Negative

Following the stabilization of implied volatility, the relationship between implied and realized volatility remains inverted, with the Volatility Risk Premium (VRP) staying negative.

One-month implied volatility currently sits around 38%, while realized volatility continues to climb to approximately 42%. Consequently, the VRP remains negative by about 4 volatility points, extending the reversal that began with the recent market sell-off.

The chart shows that even after implied volatility normalized from its early-June peak, realized volatility remained elevated. In other words, actual market volatility is higher than what options are currently pricing in. Although the gap has narrowed slightly from its recent extreme, implied volatility has yet to build sufficient premium to push the spread back into positive territory.

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

25-Delta Skew Rebuilds Across Tenors

Following the negative Volatility Risk Premium, the skew indicator reveals how demand for downside protection is evolving as Bitcoin trades near major support.

Skew is calculated as put option volatility minus call option volatility. A positive value indicates puts are trading at a premium compared to equivalent calls. Over the past week, this premium has risen across the entire curve. One-week skew increased from approximately 12% to 24%, and the one-month tenor rose from about 14% to 23%. Three-month and six-month tenors also moved higher, reaching roughly 19% and 14% respectively.

The chart shows that despite relatively stable implied volatility, downside protection underwent a broad repricing. Traders appear less inclined to pay more for volatility overall, but increasingly willing to pay a premium for downside hedges.

With protection demand rebuilding across tenors, this indicates that while volatility levels are stable, traders still exhibit a renewed preference for downside hedging.

Gamma Exposure Concentrated Near Current Spot

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

Recent flows indicate traders are becoming more comfortable selling premium. Over the past seven days, put selling accounted for the largest share of traded premium, at 31.2%. This trend intensified over the last 24 hours, with put selling reaching 47.2%.

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

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

Conclusion

Bitcoin continues to trade in a market defined more by caution than conviction. On-chain metrics show the asset at a deep discount relative to the average investor cost basis, while persistent loss realization confirms the bear market remains firmly entrenched. Simultaneously, ETF outflows and defensive positioning in the options market underscore a broad lack of risk appetite among institutional and derivatives participants.

Yet, beneath the surface, there are early signs the environment is beginning to stabilize. Coinbase spot flows have turned constructive, the Short-Term Holder cost basis has adjusted lower, and the recent weakness has been primarily driven by spot sellers rather than excessive leverage. While these developments do not signal an imminent reversal, they are characteristic of the early stages of a bottom formation process.

For now, the market remains in a tug-of-war between continued distribution and emerging value-driven demand. The outcome of this battle will define Bitcoin's next major move.