Institutions keep selling and spot selling pressure continues. Is Bitcoin’s $54,000 level a potential bottom?

Original Author: Glassnode

Original Translation: AididiaoJP, Foresight News

Bitcoin has fallen below $60,000, with loss realization, ETF outflows, and defensive options positions 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 for short-term holders has dropped to $71,400, indicating that new buyers are accumulating below the cycle average for the first time, a constructive early step towards forming a bottom. (As of press time, 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, with the center of gravity tilting toward the Realized Price of $53,400 rather than the True Market Mean Price.
• A dense supply cluster of short-term holders is located in the $66,800-$70,700 range, forming the most immediate overhead resistance. Short-term upside is limited until this area 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 Return: US investors are showing 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, the volatility risk premium stays negative.
• Downside Protection Demand Rebuilds Across Tenors: Skew has risen significantly, even though overall volatility pricing remains relatively restrained.
• Recent Flow Shifts Towards Selling Premium: Market maker positioning is still dominated by long gamma in the 60K-64K range, helping to contain volatility near the current spot price.

Macro Insights

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

The 10-year US Treasury yield remains around 4.50%, showing no signs of decline. The VIX rose from 16.2 mid-week to close at 19.49 on Friday. While not panic levels, the directional change warrants attention. Equity markets have digested the spring pullback, with the S&P 500 at 7,365 points, up 14% from the April low and firmly above its 200-day MA of 7,007 points.

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

On-Chain Insights

Deep Discount Zone

Bitcoin's current price of $62,300 is well 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 for distinguishing bull and bear markets. The current 19% discount indicates that prices remain deep in a structural bear market range.

Notably, the cost basis for short-term holders has dropped 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 the bottom formation process – new capital is being deployed at prices increasingly decoupled from the overheated levels of the recent cycle.

Supply bought during this bear market phase has smaller unrealized losses compared to the broader cycle's suspended supply and is expected to show greater resilience to further pullbacks. If macro-driven declines occur in the coming weeks, the Realized Price of $53,400 could serve as a reasonable lower bound for the short-to-medium term bear market range.

Gravity Pulling Towards Lower Bound

After establishing 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 the market (in USD terms), effectively capturing whether the 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 remains tilted towards the lower end of the current range (near the Realized Price).

As 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 metric towards neutral levels (near zero) would be a strong signal that seller exhaustion is forming, preconditions for a transition towards a bull market are beginning to emerge.

Overhead Supply Limits Short-Term Moves

In addition to the broader negative capital flow environment, the local concentration of short-term holder supply overhead further weighs on the price. The most significant cluster is in the $66,800-$70,700 range, representing recently accumulated tokens now at a loss, likely to generate selling pressure during any bounce attempt.

This zone effectively defines the most probable ceiling for short-term consolidation or relief rallies, as holders within this range tend to act around break-even levels when prices approach their purchase cost. Sustained reclaiming of the $66,800 level 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 overhead supply remains an active anchor suppressing upward momentum.

Off-Chain Insights

Continued ETF Outflows

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

Notably, past corrections often attracted ETF buying, providing an important source of demand during weak periods. However, this sustained redemption indicates that many investors are choosing to reduce exposure rather than accumulate during the downturn.

While overall ETF flows are negative, 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 the weakness is primarily driven by legacy holder liquidation and portfolio rebalancing rather than a unified retreat across the entire ETF sector.

Spot Buyers Begin to Return

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

The most significant development is the divergence between exchanges. The Coinbase spot CVD bias has recovered significantly and returned to positive territory, indicating that buying activity on the platform typically associated with US institutional participants is returning. In contrast, Binance remains in negative territory, suggesting 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 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 are already starting to view current prices as attractive entry levels.

Futures Follow Spot Decline

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

This situation has started to change. As Bitcoin retests the lows, open interest has surged significantly, and the futures CVD has now turned negative alongside spot, suggesting that leveraged participants are finally joining the move rather than resisting it. Simultaneously, funding rates have retreated from highs, alleviating the increasingly detached long bias from price action.

Spot carried the heavy lifting during the decline, and derivatives are now following rather than leading. If open interest continues to increase while futures CVD declines and funding rates soften, it will confirm that leverage is capitulating to the lows already sold off in the spot market – a form of broad participation that often marks a more violent, and often more complete, washout phase.

Implied Volatility Stabilizes After Recent Repricing

The options market has entered a calmer range after the sharp repricing triggered by Bitcoin's decline 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%. The one-month tenor decreased from approximately 40% to 38%, while longer tenors remained relatively stable, with three-month and six-month implied volatility hovering around 39% and 42%, respectively.

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

With implied volatility returning to a stable range, the options market exhibits a lower sense of 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 staying negative.

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

The chart shows that even after implied volatility normalized from early June peaks, realized volatility remains high. In other words, the market's actual volatility is greater than what options are currently pricing. While the gap has narrowed slightly from recent extreme levels, implied volatility has not yet rebuilt enough force to push the spread back into positive territory.

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

25-Delta Skew Rebuilds Across Tenors

After the volatility risk premium turned negative, the skew metric reveals how demand for downside protection has evolved 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 over 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 has undergone a broad repricing. Traders seem less focused on paying more for overall volatility and are increasingly willing to pay a premium for downside hedges.

The rebuilding of protection demand across tenors indicates that, even with stable volatility levels, traders have a renewed preference for downside hedging.

Gamma Exposure Concentrated Near Current Spot Price

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

Recent flow shows traders are 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 has intensified over the past 24 hours, with put selling comprising 47.2%.

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

Market maker positioning remains dominated by long gamma near current levels, creating conditions that are 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 show the asset is at a deep discount relative to the average investor's cost basis, while ongoing loss realization confirms the bear market remains firmly entrenched. Concurrently, ETF outflows and defensive positioning in the options market underscore a broad lack of risk appetite among institutional and derivative participants.

Beneath the surface, however, there are early signs that the environment is beginning to stabilize. Coinbase spot flows have turned constructive, the short-term holder cost basis is adjusting downward, 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 ongoing distribution and emerging value-driven demand, and the outcome of this battle will define Bitcoin's next major directional move.