Here’s another rewritten version with a smoother, more concise flow:
Bitcoin pushed closer to $65,000 after weaker-than-expected inflation data, but on-chain metrics indicate that two major groups of investors are using the rally to sell.
Despite supportive macro conditions lifting BTC, both long-term and short-term holders are offloading positions, which could cap further gains.
Long-term holders — defined by Glassnode as wallets holding bitcoin for at least five months — appear to be surrendering. Many who bought near last year’s highs are taking advantage of the rebound to exit at a loss instead of holding through further volatility, signaling fading confidence in the strength of the recovery.
Meanwhile, short-term holders are also contributing to the selling pressure. Investors who accumulated BTC near recent lows are now locking in profits at a pace exceeding $4 million per day, mirroring activity seen in May when bitcoin briefly climbed toward its 200-day average above $82,000.
With both groups selling simultaneously, the market is facing increased overhead supply just as prices attempt to move higher. This suggests that conviction remains weak, particularly among investors still underwater from earlier in the cycle.
Analysts note that as bitcoin approaches $66,000, realized losses among long-term holders are rising sharply. Many who bought near the peak are using the relief rally to exit positions, accepting smaller losses than they would have faced when BTC traded below $60,000 — a sign of diminishing confidence.
At the same time, profit-taking from short-term holders is accelerating, with selling volumes approaching levels last seen near May’s local highs, further weighing on the rally.
Bitcoin has rebounded from roughly $61,500 to near $65,000 this week, with most of the gains coming after Tuesday’s inflation data. June’s consumer price index rose 3.5% year-over-year, below the 3.8% forecast, indicating a cooling trend. Core CPI, which excludes food and energy, increased 2.6% annually and showed no monthly change.
The producer price index also came in softer than expected, reinforcing expectations of easing inflation. This has reduced fears of additional Federal Reserve rate hikes, pushing the dollar index down about 0.5% to 100.48 and dragging Treasury yields lower.
Still, some analysts remain cautious. They argue that declining oil prices played a key role in the softer inflation reading, and with oil now rebounding, the data may not reflect current conditions.
Ryan Lee, chief analyst at Bitget, noted that the drop in inflation was largely driven by a sharp fall in gasoline prices during June — a trend that has already reversed. He pointed out that Brent crude has climbed to a one-month high as tensions around the Strait of Hormuz intensify.
According to Lee, markets may be reacting to outdated data, while July’s inflation figures could reflect rising geopolitical risks.
Jasper De Maere, an OTC trader at Wintermute, also urged caution. While acknowledging that the inflation data is supportive, he emphasized that broader risks persist.
He noted that U.S. strikes on Iran are ongoing and that market sentiment remains fragile, with the Fear & Greed Index only edging up from 22 to 25 — still in extreme fear territory. One favorable inflation report, he said, is not enough to signal a lasting shift in market sentiment.
