Bitcoin Rebound Faces Dual Selling Pressure From Long- and Short-Term Holders

The latest US consumer-price reading matched expectations, while softer producer-price data eased fears that persistent inflation could force the Federal Reserve into a more hawkish stance. The reports removed a key tail risk but failed to unlock a decisive rally in digital assets, leaving Bitcoin trapped in a range as crowded long positions and unusually subdued trading activity limited momentum.

Bitcoin edged down toward $63,500, slipping below the closely watched $64,000 level, while most major crypto tokens also weakened despite gains in US equities. With the inflation releases offering relief but little fresh impetus, traders shifted their attention to the Federal Reserve’s Jackson Hole symposium in August, signals on the path of interest rates and upcoming US employment reports as the next potential market catalysts.

Bitcoin remains under technical pressure as elevated interest rates and volatility across risk assets curb demand for speculative exposure. A “death cross,” in which a shorter-term moving average falls below a longer-term gauge, is commonly interpreted as a bearish signal. Softer U.S. employment data has strengthened expectations for Federal Reserve rate cuts, but the 50-day moving average remains the key barrier to a more durable recovery.

On Aug. 11, bitcoin briefly rallied to $65,000 before surrendering the advance, failing again to clear resistance at its 50-day moving average. The bearish death-cross pattern remained intact even as weaker-than-expected U.S. labor data improved the macro backdrop for rate-sensitive assets. Traders in prediction markets were split on the near-term path, underscoring limited conviction and suggesting that expectations for Federal Reserve easing have yet to translate into sustained crypto demand.

Bitcoin’s recovery toward $64,000 would ordinarily signal improving risk appetite and renewed capital inflows, but CryptoQuant’s on-chain indicators suggest the move lacks a meaningful demand revival. The demand-to-issuance ratio measures whether fresh buying can absorb newly available supply, while coin-age net flow tracks movements across different holder cohorts. Both metrics are closely watched for evidence that a rally is supported by durable purchasing rather than a temporary shift in market liquidity.

Bitcoin recently climbed as high as $64,600, yet CryptoQuant said the demand-to-issuance ratio and coin-age net flow remained negative. About 85,000 BTC also stayed dormant, offering little indication that new external capital was entering the market. The analytics firm’s assessment is that reduced selling pressure, rather than stronger buying, drove the rebound. Without an expansion in fresh demand after the latest move, the rally could gradually lose momentum.

Bitcoin’s rebound follows a weak second quarter in which its main demand channels faded and trading activity thinned. The $68,000 area matters because Bitfinex says it combines the short-term holder cost basis, reflecting the average entry price of buyers over the past five months, with the second-quarter opening level. A first retest could prompt underwater holders to sell at breakeven, making the threshold a key test of whether the recovery can develop into a sustained advance.

Bitcoin climbed above $66,000 on July 21, its highest in more than a month, extending a rebound of more than 15% from its early-July low. U.S.-listed spot bitcoin ETFs logged a sixth straight session of net inflows by July 22 and attracted about $779 million since July 13, according to SoSoValue. Still, K33 Research said 30-day spot volume stood at just 62.4% of the annual average on July 19, underscoring a seasonal “summer slumber” as the token approaches $68,000.

Bitcoin, the world’s leading cryptocurrency, is widely viewed as a barometer for risk assets. A recent escalation in geopolitical conflict has pushed oil prices higher, while stress in Japan’s bond market and the prospect of selling by Strategy have heightened investor concerns about a renewed global regulatory crackdown. Together, these headwinds have put Bitcoin at risk of retesting a key psychological threshold. Whether that support holds will be an important signal for the broader digital asset market.

Geopolitical risks weighed on risk assets after former US President Donald Trump warned in mid-July that the United States would forcibly operate the blocked Strait of Hormuz. Bitcoin briefly fell below $62,000 on July 15 before testing support at $60,000. The latest data, however, showed signs that panic selling was stabilizing on July 16 as sellers’ profit margins fell to zero. The market is now watching closely to see whether Bitcoin can hold the $60,000 level.

As a non-yielding asset, Bitcoin is particularly sensitive to interest rates, the dollar and market liquidity. Federal Reserve Chair Kevin Warsh’s comments about persistent inflation briefly spurred demand for safe-haven assets. But rising Treasury yields, strong earnings from AI technology stocks and continued outflows from U.S. spot Bitcoin ETFs redirected capital toward fixed-income and equity markets.

A July 2 report showed Bitcoin climbing back above $60,000 on Wednesday, though it remained 53% below its all-time high. The five-year U.S. Treasury yield rose to 4.22%, while CME FedWatch put the probability of a rate increase by September 16 at 64%, up from 23% a month earlier. With the dollar index closing in on a one-year high, the market increasingly viewed a near-term advance to $65,000 as more difficult.

The 11 U.S.-listed spot Bitcoin ETFs have become an important gateway for institutional capital entering the crypto market, and their flows are also viewed as an indicator of price support. ETF redemptions, aggressive selling in spot and futures markets, and demand for options hedges are now rising in tandem, suggesting the correction may be more than a pullback after a rally.

Bitcoin fell about 6% from $82,000 to $76,800 and dropped below $77,000 again on May 22. SoSoValue data showed that the 11 ETFs had recorded more than $1.5 billion in outflows since May 7, including $648 million on May 18 alone. Glassnode said spot cumulative volume delta, or CVD, had fallen to negative $126.2 million, with key support at $74,000–$76,000.

Bitcoin and risk assets such as U.S. stocks are highly sensitive to the outlook for U.S. interest rates. A hotter-than-expected Producer Price Index from the U.S. Labor Department pushed back market expectations for Federal Reserve rate cuts. Persistent bond-market concerns over inflation and broader economic risks drove capital toward safe-haven assets such as gold, putting cryptocurrencies under selling pressure.

Bitcoin initially fell to about $65,000 in a weekend sell-off, while Solana, XRP and Dogecoin each dropped about 6%. Although Bitcoin and U.S. stocks briefly stabilized afterward, the cryptocurrency failed to hold above $66,000. Market analysis remained cautious on March 27, with Bitcoin holders' unrealized losses estimated at $600 billion. Only some AI-related tokens continued to attract buying interest.

Bitcoin has seen buying significantly outpace selling near $65,000, indicating that investors are actively buying the dip. This rare trading setup matters because sustained market support could ease near-term selling pressure and create conditions for a rebound from recent lows.

The latest data puts BTC’s key threshold at $66,700. Analysts say holding consistently above that level could trigger a relief rally toward $71,000, representing a potential gain of about 6.4%. The reports did not identify the data provider, the date of the figures or the observation period.

Bitcoin is highly sensitive to interest-rate and inflation expectations. February’s consumer price index from the U.S. Bureau of Labor Statistics matched market forecasts and did not support a near-term Federal Reserve rate cut. Still, falling oil prices helped ease inflationary pressure and supported risk assets including cryptocurrencies.

Bitcoin quickly reversed its overnight losses after the February CPI release, first breaking above $70,100 and then climbing past $71,000. Markets also digested news of a 400 million-barrel oil release. Ether, Solana and Cardano (ADA) rose in tandem, showing little drag from weakness in U.S. stocks.