Bitcoin's bounce is full of sellers, but their supply is running dry

Bitcoin (BTC) price pushed back above $65,000 then slipped under the level as two groups of investors sold into the rally, a recovery that still has to prove it can hold.

The selling looks heavy up close. Yet, across the cycle, though, the wave of supply that met every 2026 rally is no longer building.

Bitcoin’s price rally ran straight into sellers

Bitcoin's recent rally followed softer-than-expected Consumer Price Index (CPI) and Producer Price Index (PPI) data, easing concerns that inflation would force the Federal Reserve to keep raising interest rates. 

As BeInCrypto reported, the CPI fell seasonally adjusted 0.4% in June, bringing the annual inflation rate down to 3.5%. The monthly decline was the steepest since April 2020. Meanwhile, the PPI rose 5.5% year over year, below economists' 6.2% consensus forecast.

The cooler inflation data prompted traders to scale back expectations for another rate hike. According to the latest CME FedWatch data, the probability of a July rate increase has dropped to 10.2%, down from 24.6% a week earlier.

Despite the macroeconomic tailwind, Bitcoin has slipped back into the red. The cryptocurrency was down nearly 0.13% over the past 24 hours, trading at $64,720 at the time of writing.

Bitcoin (BTC) Price Performance. Source: BeInCrypto Markets

Glassnode noted that BTC’s rally was met with heavy selling pressure from two groups of investors. Long-term holders (LTHs) are cutting losses, while short-term holders (STHs) who bought at near lows are banking gains.

“Two forces anchoring the rally simultaneously: 1- Cycle-top buyers reducing losses into strength 2- Local-low buyers locking in gains. Both are selling into the same price recovery,” Glassnode said.

Why the selling wave is fading

Despite this, zoom out, and the supply is thinning. Glassnode noted that the Relative Long/Short-Term Holder Realized Profit and Loss shows the LTH share has stopped growing. The supply that met every rally is no longer expanding.

“The Relative Long/Short-Term Holder Realized Profit and Loss splits everything sold on-chain into four buckets: old hands and recent buyers, each selling at a profit or at a loss. For most of the cycle, long-term holders selling at a profit dominated that mix. That flow has dried up almost completely; what old hands sell now, they sell at a loss,” the report read.

Long-Term Holder Profit-Taking Is Drying Up. Source: Glassnode

The pace of selling has also turned. Glassnode's Entity-Adjusted Long-Term Holder Realized Loss, which strips out internal transfers to measure what these holders actually give up each day, peaked two weeks ago and has now declined. 

The firm had flagged a cooldown in this exact metric as the precondition for any durable recovery, making its first cycle-turn the clearest sign yet that the selling is easing.

At the same time, buyers have stepped in. The Accumulation Trend Score shows broad buying at the June lows across both small and large wallets. 

Confirmation, however, is missing. Derivatives traders are unwinding downside bets, but spot buying has not followed. US-spot Bitcoin exchange-traded funds (ETFs) took in $181 million on July 14 and $108 million on July 15, per SoSoValue, though inflows must hold.

That leaves $69,000 as the referee. A clean reclaim gives the recovery room to run, while a rejection keeps Bitcoin locked in its range.

“The Short-Term Holder Cost Basis near 69K, the break-even of recent buyers, is the next overhead resistance; expect a strong reaction there,” the firm said.

Whether spot demand carries price through that break-even is the question the coming sessions will answer.