Key Takeaways:
More than half of all Bitcoin is now underwater, yet long-term holders are quietly accumulating at the fastest pace in months.
Bitcoin's loss-making supply exceeded profitable coins by 1.61 million BTC on July 2, with 54% of the circulating network now in the red, Glassnode data shows.
"Historically, sustained transitions from net distribution to net accumulation have often emerged during periods of market weakness, as long-term investors gradually increase their holdings while shorter-term participants de-risk," Glassnode said in its Week Onchain report.
Roughly 10.83 million BTC sat at a loss as of July 2, against 9.22 million still in profit, the data provider said. The long-term holder net position change flipped positive after an extended distribution phase, with accumulation running at 50,000 to 100,000 BTC on a net basis. Small wallets holding less than 1 BTC led the buying with an accumulation trend score near 0.9, while mid-sized entities holding 100 to 1,000 BTC also showed strong accumulation at roughly 0.8. The largest whale cohort — wallets with more than 10,000 BTC — remained neutral at about 0.5.
The divergence between institutional selling and old-holder accumulation mirrors patterns seen at prior cycle bottoms in 2011, 2014, 2018 and 2020, according to Glassnode. Bitcoin traded at $58,223 as of 21:10 UTC on July 1, down 2.5% on the day, with open interest rising 1.5% as short sellers entered the market. The next test for the accumulation thesis: whether the largest whales join the buying before the September 2027 debt maturity at Strategy, the largest corporate holder with 847,363 BTC at an average cost of $75,651.
The on-chain data reveals a market split along two distinct paths. Wall Street-linked entities and short-term speculators have been reducing exposure, pushing Bitcoin below $60,000 for the first time since early 2024. Nearly $250 million in crypto positions were liquidated in the 24 hours through July 1, with $183 million in long positions alone erased, Coinglass data shows.
Yet the cohort that matters most — wallets that have held coins for at least 155 days — is moving in the opposite direction. Glassnode's Accumulation Trend Score, which measures buying behavior across wallet sizes on a rolling 30-day basis, has shifted meaningfully higher over the past month, suggesting broad-based bargain hunting beneath the surface price weakness.
"Historically, periods where accumulation becomes widespread across wallet sizes have often provided a constructive foundation for longer-term market recoveries, although confirmation through sustained buying remains key," Glassnode said.
The Crypto Fear & Greed Index remained in "Extreme Fear" territory, a reading that has historically coincided with major cycle bottoms. Ali Martinez, a cryptocurrency analyst, noted that the crossover of supply in loss exceeding supply in profit has aligned with cycle lows in 2011, 2014, 2018 and 2020.
For the accumulation trend to become self-sustaining, the largest holders need to commit. Until then, the market remains in a waiting game — old holders buying what Wall Street is selling, with the outcome likely determined by whether Bitcoin can hold above its next major support level.
This article is for informational purposes only and does not constitute investment advice.
