Here’s a more concise and polished rewrite:
Bitcoin rallied toward $65,000 after softer inflation data, but on-chain indicators show that two key groups of investors are using the strength to sell.
Even as macro conditions support the move higher, both long-term and short-term holders are offloading BTC, potentially limiting further upside.
Long-term holders — defined by Glassnode as wallets holding coins for at least five months — are increasingly capitulating. Many who bought near last year’s peaks are taking advantage of the rebound to exit at a loss rather than wait for a full recovery, reflecting weak confidence in the rally’s staying power.
Short-term holders are also adding to the pressure. Those who accumulated bitcoin near recent lows are now taking profits at a pace exceeding $4 million per day, echoing selling activity seen in May when BTC briefly climbed toward its 200-day average above $82,000.
This simultaneous selling from both groups is creating overhead supply just as bitcoin attempts to break higher, signaling lingering uncertainty among investors still underwater.
Analysts point out that as prices approach $66,000, realized losses among long-term holders are rising sharply. Many cycle-top buyers are using the rebound as an exit opportunity, accepting smaller losses compared to when BTC traded below $60,000 — a sign of fading conviction.
At the same time, profit-taking from short-term holders is accelerating, with selling volumes nearing levels seen during May’s peak, further weighing on the rally.
Bitcoin has climbed from around $61,500 to nearly $65,000 this week, with most gains following Tuesday’s inflation report. June’s CPI rose 3.5% year-over-year, below the 3.8% forecast, indicating cooling inflation. Core CPI came in at 2.6% annually with no monthly change.
The producer price index also surprised to the downside, easing concerns about further Federal Reserve rate hikes. As a result, the dollar index slipped about 0.5% to 100.48, while Treasury yields moved lower.
Still, some analysts question the durability of the rally. They argue that falling oil prices were a key driver of the softer inflation data, and with oil now rebounding, the data may already be outdated.
Ryan Lee, chief analyst at Bitget, said the CPI slowdown was largely driven by a sharp drop in gasoline prices during June — a move that has since reversed. He noted that Brent crude has climbed to a one-month high amid rising tensions around the Strait of Hormuz.
According to Lee, markets may be reacting to backward-looking data, while July’s inflation figures could reflect increasing geopolitical risks.
Jasper De Maere of Wintermute also urged caution, noting that while the inflation data is encouraging, broader risks remain.
He pointed to ongoing U.S. strikes on Iran and fragile sentiment, with the Fear & Greed Index only rising from 22 to 25 — still in extreme fear territory. One soft inflation print, he said, does not signal a lasting shift in market confidence.
