Bitcoin is experiencing a historic shift in holder behavior as the RHODL Ratio reached 6.5 in early July, marking its second-highest reading in Bitcoin's history. According to Glassnode, this closely watched onchain metric, which compares wealth held by long-term holders with newer investors, has begun to decline and is now below 6, signaling a gradual transfer of supply from established holders to a new generation of buyers. This compression is occurring without the violent selloffs seen in 2022, when the FTX collapse sent Bitcoin tumbling to around $15,000. The current trend suggests long-term holders who accumulated throughout 2023 and 2024 are distributing their positions to overly eager buyers who view current prices as discounts, following Wyckoff's distribution model typically seen at the start of bear markets.
Fidelity Research Analyst Zack Wainwright projects that Bitcoin is likely in the cycle bottoming phase as long-term holders (those who've held for over six months) are nearing a record 15 million BTC. According to Fidelity, nearly 40% of this supply is now underwater, mirroring past historical patterns where BTC bottomed out when supply in loss hit around 46%-56%. In 2022, BTC marked a bottom near $16K, and the supply in loss peaked at 50%. As of writing, Bitcoin traded at $62.8K, down 4% and close to erasing all gains from the relief rally triggered by softer CPI print. The RHODL Ratio compression occurring simultaneously with Fidelity's cycle bottom analysis suggests this historic supply rotation is coinciding with technical indicators pointing to potential market recovery.
Bitcoin is experiencing a significant shift in holder behavior as long-term holders flipped to buying for two consecutive days on July 11-12, adding a net 5,912 BTC after 12 days of continuous selling. According to Glassnode, this represents the first positive net position change since late February, when Bitcoin traded near $65,896 before rallying approximately 25% to $82,186 by May 10. The current buying pattern mirrors the February bottom signal, where patient holders began accumulating before the major price recovery. This two-day streak is particularly significant as it comes after Bitcoin's challenging June performance, with the cryptocurrency trading near $62,717 and down about 2% in the past 24 hours. The RHODL Ratio compression occurring simultaneously suggests this quiet period may be setting the stage for a significant move.
The crypto market has shown signs of recovery with the market cap rising 1.2% to $2.28 trillion, as reported by latest market data. Bitcoin is holding steady above $62,700 and most top coins are posting modest gains, marking an improvement from Bitcoin's challenging June performance. A key development driving this recovery is the return of Bitcoin ETF inflows after weeks of continuous outflows. In the week ending July 10, US spot Bitcoin ETFs pulled in approximately $197 million, marking their first green week after eight straight weeks of outflows. However, U.S. Spot Bitcoin ETF demand remains muted despite recording three consecutive days of inflows since Tuesday. According to Glassnode, the two largest entities, BlackRock and Fidelity, have seen a sustained institutional sell-off that rivals 2025, with 30-day average ETF outflows hitting over 2K BTC per day in June and early July, though this has eased slightly to about 1,250 BTC per day this week.
Despite positive onchain signals, options positioning reveals mixed sentiment as institutions and professional traders are not ruling out further pullback. In the past 24 hours, the top options volumes were concentrated at $62.5K and $56K price targets for puts (bearish bets), underscoring massive hedging for further downside protection. However, there was significant volume for calls (bullish bets) eyeing $68K and $79K, which underscored a potential sideways structure expectation in July between $55K-$70K. As of writing, $60K has been a key support, and metrics signal that it could become a potential market cycle bottom. However, sharp moves below $60K can't be overruled in the short term amid macro headwinds, with ongoing macro and geopolitical pressures potentially limiting risk appetite for crypto and U.S. equity markets in Q3.
