Key facts
- Bitcoin's price surged to nearly $65,000 following the release of softer U.S. inflation data for June.
- Both long-term holders (defined as holding for at least five months) and short-term holders are selling into the price rally.
- Long-term holders are reportedly capitulating, selling at a loss to exit positions.
- Short-term holders are realizing profits at a rate exceeding $4 million daily.
- U.S. headline CPI rose 3.5% year-over-year in June, below the 3.8% consensus.
- Core CPI showed a flat month-over-month reading, and producer prices also declined.
- The inflation data eased concerns about potential Federal Reserve interest rate hikes.
Bitcoin experienced a significant price bounce, reaching nearly $65,000, largely driven by softer-than-expected U.S. inflation data for June. The Consumer Price Index (CPI) rose 3.5% year-over-year, falling short of the 3.8% consensus forecast, and core CPI showed a flat month-over-month reading. Producer prices also came in lower than anticipated. This easing inflation picture reduced fears of further Federal Reserve interest rate hikes, leading to a weaker dollar and lower Treasury yields.
However, the price rally is being met with selling pressure from two distinct groups of Bitcoin holders. Long-term holders, defined by Glassnode as those holding for at least five months, are reportedly capitulating. These investors, who may have bought near previous cycle highs, are using the current bounce to sell their holdings at a loss, signaling a lack of confidence in the sustainability of the price increase. This pattern is consistent with exhausted conviction among underwater holders.
Simultaneously, short-term holders, who acquired Bitcoin near recent lows, are actively taking profits. This group is realizing gains at a pace exceeding $4 million per day, a selling wave reminiscent of patterns seen in May. The combined selling from both long-term and short-term holders is creating overhead supply, potentially hindering Bitcoin's ability to break higher.
Some market observers remain cautious about the rally's longevity. Analysts like Ryan Lee of Bitget point out that the June inflation data may be becoming obsolete due to a recent rebound in oil prices, exacerbated by escalating tensions in the Strait of Hormuz. Lee suggests that the July inflation print will be the first to reflect this "war premium." Similarly, Jasper De Maere of Wintermute noted that despite constructive inflation news, the broader geopolitical backdrop, including ongoing U.S. strikes on Iran, has not fundamentally shifted risk appetite, as indicated by the still-low Fear & Greed Index.