Bitcoin Enters Record ‘Deep Value Zone’ Amidst Long-Term Holder Capitulation: Is the Bear Market Nearing its End?

Bitcoin (BTC) has entered an unprecedented phase, lingering in a “deep value zone” for a record five consecutive months. This critical insight, highlighted in a recent report by leading on-chain data firm Glassnode, reveals that BTC’s price has consistently traded below both its “realized price” and the “short-term holder cost basis.” Coupled with significant capitulation from long-term holders (LTHs), this prolonged downturn suggests the current bear market may be approaching its final stages.

The extent of this capitulation is striking. Data indicates that realized losses among long-term holders now constitute 43% of the total on-chain realized value, a sharp increase from just 15% in early February. Recently, single-day realized losses peaked at $280 million, marking the highest such figure since December 2022. Despite these signals, Bitcoin’s price this week oscillated between approximately $58,300 and $64,400, remaining well below Glassnode’s defined “deep value zone” thresholds: a realized price of $76,600 and a short-term holder cost basis of $72,200.

Long-Term Holders Drive Downward Pressure as Confidence Wanes

Glassnode’s on-chain analysis points to “capitulation selling” by long-term holders as the primary source of current downward selling pressure. Many investors who acquired Bitcoin near the bull market’s peak have endured months of losses, steadfastly holding their positions. However, as the bear market extends, confidence among a significant portion of these holders is eroding, prompting them to exit the market at a loss.

Glassnode observes that this cohort of investors frequently seizes opportunities to sell whenever Bitcoin attempts a rebound, effectively stifling any sustained upward momentum and preventing the asset from breaking out of its current consolidation range.

Crucially, this indicator of LTH capitulation remains elevated, showing no signs of the rapid cool-down observed after previous large-scale surrender events in this bear cycle. Analysts suggest that a genuine shift towards a new bull market is contingent upon long-term holders ceasing their substantial sell-offs.

ETF Capital Outflows Slow, But Demand Remains Subdued

Simultaneously, institutional capital has yet to fully return to the Bitcoin market. Glassnode notes that the 30-day average capital flow for US spot Bitcoin ETFs turned negative in mid-May, reaching a peak outflow of $193 million per day in early June. While this outflow has since decelerated to approximately $89 million daily, overall demand has not yet recovered.

ETF trading activity has also cooled significantly. Daily trading volumes currently range between $650 million and $950 million, a substantial 80% reduction from the peak of $4.4 billion recorded in October 2025.

Interestingly, data from SoSoValue for July 8 showed a net outflow of $84.86 million for Bitcoin spot ETFs. In contrast, Ethereum spot ETFs experienced a positive trend, attracting $70.48 million in net inflows, marking their fifth consecutive day of positive flows.

QCP Capital, a cryptocurrency investment firm, offers a more nuanced perspective, highlighting brief periods of recovery in Bitcoin ETF flows. They note a rebound from a $691 million net outflow on June 25 to net inflows of $223 million and $265 million on July 2 and July 6, respectively. However, QCP Capital emphasizes that sustained, consecutive buying is essential to confirm a genuine recovery in market demand.

QCP Capital: The Real Test Has Just Begun Amidst Macro Headwinds

According to QCP Capital, the most pressing issue facing the market is the absence of supportive monetary policy. Recent US economic data, including June’s non-farm payrolls of just 57,000 (significantly below the estimated 110,000) and downward revisions for April and May totaling 74,000, paint a mixed picture. Yet, with annual wage growth holding at 3.5% and the M2 money supply reaching a new all-time high of $23.05 trillion in May, inflationary pressures persist. The market’s attention is now firmly fixed on the upcoming CPI data release on July 14.

QCP also flags several potential risks, including the US Strategic Petroleum Reserve (SPR) hitting its lowest level since 1983, MicroStrategy’s unprecedented decision to sell a portion of its Bitcoin holdings to fund dividends, and multiple private credit funds (such as Blue Owl, Apollo, Blackstone, HPS, Morgan Stanley, and Ares) implementing “Redemption Gates” in Q2 to limit investor withdrawals.

QCP analysts pose a critical question: “When monetary policy fails to provide a buffer, and the safety cushions in oil, cryptocurrency, and credit markets simultaneously thin, where will the true cracks in the market first appear?”

$60,000: A Critical Line in the Sand for Bitcoin

Capital.com analyst Daniela Hathorn identifies the $60,000 level as a crucial support zone for Bitcoin. Should the current rebound extend, the next significant resistance is anticipated between $65,000 and $66,000, followed by the previous high around $70,000.

Conversely, a decisive break below the recent support area would raise doubts about the sustainability of the current rebound’s momentum.

Combining insights from on-chain data, ETF capital flows, and derivatives market performance, Glassnode concludes that the cryptocurrency market currently exhibits several characteristics indicative of a “bear market bottoming.” However, investors are advised to maintain a cautious stance regarding a full bull trend reversal until long-term holders cease their selling, institutional buying stabilizes, and Bitcoin’s price convincingly reclaims its “realized price.”