Prolonged selling pressure has eased, but spot buying is still lacking, and Bitcoin is approaching its biggest pain point

According to Woofun AI, the bottom structure of Bitcoin has changed qualitatively. The capitulation sell-off of long-term holders has cooled down significantly, buying successfully absorbed the June low, and the price is challenging the previously suppressed area. Glassnode analysis indicates that the current driver has switched from risk appetite to dollar liquidity, and the market is gradually leaving the deep waters of the bear market. The data shows that although the macro environment is still complicated, the selling pressure is beginning to show signs of exhaustion, and Bitcoin is trying to find a new balance in the context of the weakening dollar.

This shift marks a shift in market sentiment from extreme pessimism to a cautious recovery, but the real reversal still needs more confirmation.

The macroeconomic data reaction revealed the loosening of Bitcoin's correlation with the stock market. The moderate inflation data released on Tuesday triggered Bitcoin to rise far more than major stock indexes. This is the most positive response to favorable news in weeks. The ten-year real yield has risen to 2.4% near the 2026 high, and the dollar has remained above the 200-day EMA since May, yet the wider range of risk assets has not shown pressure: US stocks and European stocks are close to high, credit spreads are low, and volatility remains moderate.

This differentiation shows that Bitcoin is no longer simply a stock agent, but forms a deeper inverse link with the weakening US dollar. After trading at a low level in the past month, the market's sensitivity to favorable news has increased markedly. The inflation data alone is rushing to rise, which often means that sellers are exhausted, and buyers are just waiting for a reason. If the macro environment relaxes from then on, the US dollar and liquidity channels will take the lead in transmitting influence, pushing prices to break through the current range.

According to data compiled by Woofun AI, the on-chain cost structure clearly depicts the current market position. The price of Bitcoin is higher than the average realized price (Average Price) of the entire network. This is a natural bottom support for the bear market, and is also lower than the short-term holders' cost base (close to $69,000), that is, the average entry price of buyers over the past five months. Long-term and short-term holders have achieved profit and loss relative indicators, showing that during most of the current cycle, profitable sales by long-term holders dominated sales. Today, this flow has almost completely dried up, and veterans are basically losing positions. The loss sales of the two groups constitute the main characteristics of transactions on the chain. This is a typical sign of a late bear market.

The entity-adjusted long-term holders have reached the cyclical peak of the loss target two weeks ago. Last week's report clearly indicated that the cooling of the indicator was a prerequisite for a lasting recovery, but now it has begun to decline. The cumulative trend score by wallet size shows that during the June low, there was a broad and strong buying wave, covering everything from small to large wallets. After the price stabilized, the intensity weakened, and the market entered a waiting mode. Touching the $69,000 break-even line for the first time is likely to trigger a strong reaction, as those who are most likely to sell are those who are about to pay back. A successful recovery will open up room for recovery, and if rejected, the pattern of range-bound fluctuations will continue.

Institutional capital flows and derivatives market sentiment are diverging. The redemption pressure on US spot ETFs has declined sharply from the extreme level in June, and the trend points to stabilization, but one day of this week there was still the biggest single-day outflow in several weeks, followed by partial recovery the next day. Until inflows actually return and stabilize, this is still a market where institutions have stopped fleeing but have yet to start buying. The derivatives market has reversed over the past few weeks. The bearish/bullish ratio for options has fallen to its lowest level in the year, and traders let the bearish protection expire; perpetual contract funding rates are only slightly higher than neutral, far from reaching the level of crowded bulls. Bearish bets are quietly and steadily being withdrawn, but this closing position did not result in actual purchases. Position adjustments by futures and options traders did not equal capital entering the spot market. This is the clearest warning of the current recovery.

The options market's premium on crash protection (measured by 25-Delta Skew) soared during the June sell-off and has continued to fall since then. It is now well below the February extreme level, and the hedging cost for each pullback is significantly lower than a month ago. The biggest pain point (Max Pain) is the price at which the largest share of open options is worthless at maturity. Spot prices have been fluctuating around it since this year. Bitcoin is currently below this level and is hitting it for the first time in weeks. Historically, recovering the biggest pain points is often consistent with the market shifting to a more friendly environment, although the transformation takes time. The Bitcoin Volatility Index (DVOL) is close to a one-year low, and the deep bearish pressure that erupted in February and June has subsided from the volatility curve. This compression rarely lasts, and is usually the background before the next decisive market starts.

The bottom confirmation conditions have not been fully met. This week's long-term holders' capitulation has retreated from its peak, and profits have dried up. The June low was widely absorbed by buying. Bitcoin's response to macroeconomic benefits was stronger than other assets. It is approaching the biggest pain point from below and close to the short-term holders' cost base above. It will be the first real test of recovery, and confirmation signs have yet to appear: ETF outflows are slow but not reversed, derivatives liquidation lacks spot follow-up, and volatility compression awaits a catalyst. The key signal to change judgment is that spot-driven buying pushes prices to effectively break through and maintain the short-term holders' cost base. If long-term holders' losses accelerate again, or if the price is brought back close to the actual price, the market will return to fluctuating in a range. The foundation has been laid, follow-up is yet to come, and the market is at the crossroads of range-bound shocks and trend breakthroughs, awaiting the next decisive catalyst.