Bitcoin (BTC) has undergone a sustained and deep price correction since reaching its all-time high of approximately $126,000 in October 2025. According to Gate market data, as of July 17, 2026, Bitcoin was priced at $63,566.4, down 1.62% over the past 24 hours, rebounding 0.72% in the past 7 days, up 2.46% over the past 30 days, but down 45.66% year-over-year. Calculated from the cycle peak, the maximum drawdown has exceeded 49%.
The market has entered a classic "panic–accumulation" phase. Data from Alternative.me shows the Crypto Fear & Greed Index rose to 27 on July 17, up from 25 the previous day, but still firmly in the "fear" zone. Gate Research Institute reported the same day that the index stood at 33, indicating some recovery in sentiment, but risk appetite has not shifted into full expansion mode.
On-chain data reveals several indicators pointing to extreme valuation compression. The MVRV Z-Score has dropped 74% from its October 2025 cycle peak of 2.603 to 0.674, well below the average of 1.72 and the first standard deviation range of 3.55, signaling that valuation bubbles have largely been eliminated. The current MVRV ratio is around 1.13, near historical lows. The network-wide average realized price of Bitcoin is approximately $53,400, with the current price only about 12% higher.
The 30-day average of SOPR (Spent Output Profit Ratio) has fallen to 0.99, consistently below the critical break-even line of 1.0, indicating that most market participants are selling Bitcoin at a loss. From May to July, this indicator was below 1.0 for 37 out of 61 days, reflecting persistent selling pressure and realized losses. The short-term holder cost basis is currently near $69,000, which is both the average entry price for recent buyers and coincides with Bitcoin’s all-time high in 2021, forming a key resistance level for the current market.
Bitcoin has traded below the actual market average price of $76,600 and the short-term holder cost floor of $72,200 for about five consecutive months, placing it in a deep value zone. This duration is rare historically and suggests a bottom is forming, though a sustained rebound has yet to be confirmed.
Glassnode: Long-Term Holder Loss Pressure Is Easing, Signaling a Bottom
On-chain analytics firm Glassnode’s latest July report suggests Bitcoin may be in the early stages of building a market bottom. The core shift comes from changes in long-term holder behavior.
The main source of selling pressure in this bear market—capitulation selling by long-term holders—peaked two weeks ago and has started to decline. The entity-adjusted realized loss metric for long-term holders, which excludes internal transfers, accurately reflects the number of Bitcoins surrendered daily by long-term holders. This metric hit a cycle high in early July before turning downward, marking the first time in this cycle that a key bottoming indicator has shifted from rising to falling.
Another critical signal comes from the cohort that bought Bitcoin between July 2024 and July 2025—the 1-2 year holders. Glassnode data shows their 30-day realized loss average has reversed downward from a $75 million peak. Glassnode’s Chief Research Analyst Cryptovizart noted: "When their 30-day simple moving average of realized losses cools and turns downward, it’s usually one of the clearest signals that the worst phase of distribution has passed."
Historically, this reversal pattern has often preceded lasting bear market bottoms. In its weekly report, Glassnode emphasized that the Bitcoin price remains above the network-wide average realized price—a natural support during bear markets—while still below the short-term holder cost basis (near $69,000). This places the market in a narrow band "between the floor and the ceiling."
It’s important to note that the reversal in realized losses isn’t an isolated signal. Daily realized losses approached $280 million on July 9, the highest since 2022. Meanwhile, buying activity successfully absorbed selling near the June lows. Glassnode’s accumulation trend score shows wallets of all sizes actively increased holdings as Bitcoin neared recent lows. Derivatives traders are unwinding bearish positions, but spot buying has not fully followed—this is the missing link in the current recovery.
Glassnode concludes that Bitcoin may be forming a new market bottom, but the $69,000 level remains a critical resistance. Only a decisive breakout and sustained hold above this area would confirm a new upward trend.
Why Did Grayscale Launch a Covered Call Strategy for Bitcoin?
As the market searches for a bottom, Grayscale, the world’s largest crypto asset manager, launched an analysis of a Bitcoin covered call options strategy in July, drawing widespread attention.
Grayscale’s Head of Research, Zach Pandl, stated clearly that while there are some positive signals, it’s impossible to precisely predict how this Bitcoin bear market will evolve. In this "high volatility, low trend" environment, the covered call strategy offers a unique value proposition.
The mechanics are straightforward: investors hold a spot long position in Bitcoin while selling an equivalent amount of call options, earning the premium paid by buyers as additional income. In Grayscale’s hypothetical example: a covered call strategy expiring at the end of 2026, with spot Bitcoin at $65,000, implied volatility at 40%, and an expected annualized return of about 22%. The breakeven point is above $58,500, and within the $65,000–$72,500 range, returns outperform simply holding spot Bitcoin.
The core logic reflects changing investor needs. In previous bull cycles, the main goal was "buy Bitcoin and wait for price appreciation." Now, during a sideways market, holders are looking for extra yield while maintaining their position. Option premiums provide both cash income and some downside protection—if spot Bitcoin falls below the breakeven point, losses from the covered call strategy are less than simply holding spot, with the difference equal to the received premium.
However, this strategy comes at a cost. Its biggest risk is limiting upside potential when Bitcoin rallies strongly. Selling calls means investors forfeit gains above the strike price. Thus, the strategy is best suited for markets that have established a sustainable bottom but are expected to trade sideways before any recovery.
The timing of Grayscale’s strategy analysis is itself a signal—when an institution managing tens of billions systematically promotes "yield in a sideways market," it often means they don’t expect a sharp rally soon, nor anticipate further steep declines.
$69,000 Emerges as the Key Resistance for BTC’s Next Phase
Technical and on-chain data converge around the $69,000 mark. This price has dual significance: it’s both the short-term holder cost basis and Bitcoin’s historic high from 2021.
The short-term holder cost basis represents the average entry price for investors who bought Bitcoin in the past five months. When the price is below this level, recent buyers are collectively underwater. Glassnode notes that the first touch of this level is likely to trigger a strong reaction, as those closest to breakeven are most likely to sell.
Based on this, two scenarios emerge:
Scenario 1: Decisive Breakout Above $69,000. If Bitcoin can break through and hold above the short-term holder cost basis on spot-driven buying, it means recently trapped buyers have exited without triggering mass selling, confirming market confidence. This could open the door for renewed risk appetite. Trader Michaël van de Poppe expects a path toward $75,000–$80,000 may open before August.
Scenario 2: Rejection and Pullback. If strong selling pressure prevents a breakout at $69,000, the sideways range will persist. The key signal to watch is spot-driven buying—if long-term holder losses accelerate again or price drops back toward the realized price, the market will revert to a range-bound pattern.
It’s worth noting that the missing link in the current recovery is spot buying. Derivatives traders are unwinding bearish positions, which reduces selling pressure but doesn’t mean new buying power is in place.
Three Variables Will Shape BTC’s Future Trajectory
① Federal Reserve Rate Path
On July 9, 2026 (UTC+8), the Fed released the minutes from its June FOMC policy meeting. The committee unanimously decided to keep the federal funds rate target range at 3.50%–3.75%, but the minutes revealed deep internal divisions. Nine out of 19 FOMC members expect at least one rate hike before the end of 2026, raising the median rate forecast from 3.4% in March to 3.8%.
The CME "FedWatch" tool shows a 74.3% probability that rates will remain unchanged at the July FOMC meeting, with a 25.7% chance of a cumulative 25-basis-point hike. The probability of a July rate hike is still 31%, and the chance of a September hike is nearing 70%. Until August CPI data provides clear direction, the market may continue to swing amid uncertainty.
② ETF Capital Flows
Spot Bitcoin ETF flows are a key window into institutional sentiment. On July 13, Bitcoin ETFs saw $424.66 million in net outflows. However, the next two trading days reversed: July 14 saw $239.4 million in net inflows across crypto ETFs; July 15 brought $107.8 million in net inflows to Bitcoin ETFs, with BlackRock’s IBIT leading at $808.2 million. Ethereum ETFs also recorded $53.83 million in net inflows.
The volatility in ETF flows shows institutional money has not yet established a consistent return trend. Glassnode data indicates daily outflows from spot Bitcoin ETFs have dropped from $193 million to $88.9 million, though net outflows persist. The options market’s call/put ratio has fallen to 0.56, the lowest this year, suggesting declining demand for bearish positions.
③ Is On-Chain Selling Pressure Over?
This is the core variable determining the quality of the bottom. Cooling of long-term holder capitulation selling is a positive sign, but a single decline doesn’t prove selling pressure is exhausted—new shocks could restart selling. The market needs confirmation on two fronts: first, that realized losses by long-term holders remain low and don’t rise again; second, that spot-driven buying starts to dominate price action, rather than relying solely on derivatives short covering.
Conclusion
Has Bitcoin exited the bear market? The answer isn’t found at a single price point, but in whether selling pressure is truly exhausted, buying is sustained, and macro liquidity is turning accommodative. Glassnode’s on-chain data points to a bottom structure forming—long-term holder capitulation is cooling, realized losses are falling from peaks, and valuation metrics are at historic lows—signals highly reminiscent of past bear market bottoms. But a bottom zone doesn’t guarantee an immediate reversal. The $69,000 short-term holder cost basis is the most critical level to watch; a decisive breakout opens upside potential, while rejection means continued consolidation.
The timing of Grayscale’s covered call strategy launch reflects institutional judgment on the current market: no expectation of further steep declines, nor anticipation of a near-term unilateral rally. With the Fed’s rate path unclear, ETF flows volatile, and on-chain selling pressure needing further confirmation, the Bitcoin market stands at a pivotal stage: "near the bottom, but reversal not yet confirmed."
FAQ
Q1: What are Glassnode’s key indicators for identifying a Bitcoin bottom?
Glassnode primarily tracks changes in realized losses among long-term holders. When this metric falls from its peak and continues downward, it typically signals the worst phase of selling is over. Additionally, the MVRV ratio, SOPR, and short-term holder cost basis are important on-chain indicators for bottom assessment.
Q2: What market conditions suit Grayscale’s covered call strategy?
The covered call strategy is best suited for markets that have established a sustainable bottom but are trading sideways before recovery. By selling call options and collecting premiums, holders can generate about 22% annualized yield in a range-bound market, though the strategy limits upside if Bitcoin rallies sharply.
Q3: Why is $69,000 a key resistance level for Bitcoin?
$69,000 is the short-term holder cost basis—the average entry price for investors who bought Bitcoin in the past five months. It’s also the region of Bitcoin’s historic high from 2021. When price first touches this level, recent buyers are near breakeven, which can trigger selling pressure.
Q4: How do Bitcoin ETF flows impact the market?
Spot Bitcoin ETFs are a major channel for institutional capital entering crypto. Persistent net inflows signal renewed institutional demand and provide buying support; sustained net outflows reflect rising risk aversion. In mid-July, ETF flows shifted from consistent outflows to intermittent inflows, but a stable trend has yet to emerge.
Q5: How does Fed monetary policy affect Bitcoin’s price?
The Fed’s rate path directly influences global dollar liquidity and risk asset valuations. Rising rate expectations tighten liquidity and pressure assets like Bitcoin; easing expectations release liquidity and support Bitcoin rebounds. The FOMC is currently divided, with nine members supporting a rate hike this year, leaving the market in uncertainty.
