Fidelity Analyst Sees Bitcoin Cycle Bottom as 40% Supply Turns Underwater

Bitcoin is showing signs of forming a market cycle bottom after a persistent downturn since last October, according to Fidelity Research Analyst Zack Wainwright. Long-term holders, defined as those who have held for over six months, are nearing a record 15 million BTC, with over 40% of this supply now underwater. On a 30-day average, BTC supply in loss climbed to 50% as the asset slipped below $63K on Friday, 17th of July. This level has previously aligned with Bitcoin's bottoming process, mirroring historical patterns where BTC bottomed when supply in loss hit around 46%-56%. In 2022, BTC marked a bottom near $16K with supply in loss peaking at 50%.

U.S. Spot Bitcoin ETF Outflows Reach 2K BTC Daily in June and Early July

Despite recording three consecutive days of inflows since Tuesday, U.S. Spot BTC ETFs have been muted on a month-over-month average. According to Glassnode, the two largest entities, BlackRock and Fidelity, have seen a sustained institutional sell-off. The 30-day average ETF outflows hit over 2K BTC per day in June and early July. This eased slightly to about 1,250 BTC per day this week. ETF trade volumes have also dropped, indicating reduced speculative interest.

Options Positioning Concentrates at $62.5K and $56K Price Targets

As of writing, Bitcoin traded at $62.8K, down 4%. In the past 24 hours, the top Options volumes were concentrated at $62.5K and $56K price targets for puts, indicating bearish bets and massive hedging for downside protection. Significant volume for calls was concentrated at $68K and $79K price targets, representing bullish bets.

FAQ

What percentage of Bitcoin long-term holder supply is currently underwater according to Fidelity?

According to Fidelity Research Analyst Zack Wainwright, over 40% of the long-term holder supply is now at a loss. On a 30-day average, BTC supply in loss climbed to 50% as the asset slipped below $63K on Friday, 17th of July.

What were the U.S. Spot Bitcoin ETF outflow levels in June and early July?

According to Glassnode, the 30-day average ETF outflows from BlackRock and Fidelity hit over 2K BTC per day in June and early July. This eased slightly to about 1,250 BTC per day this week.

What price targets are Options traders focused on for Bitcoin?

In the past 24 hours, the top Options volumes were concentrated at $62.5K and $56K price targets for puts. Significant volume for calls was concentrated at $68K and $79K price targets.