Bitcoin’s Push Toward $65,000 Brings Sellers Out as Inflation Cools
Bitcoin climbed close to $65,000 after U.S. inflation came in below forecasts. Then the relief faded—fast. Two investor groups sold into the rally, though not for the same reason: some took profits, while others cut their losses and left. Most market summaries would call that routine selling. That is only half right. To me, the overlap matters because it shows how many holders still doubt the rally has legs. Another climb could get messy.
Bitcoin rose from $61,500 to nearly $65,000 this week, with most of the move arriving Tuesday after the latest U.S. inflation figures. Headline CPI rose 3.5% from a year earlier in June, below the 3.8% consensus estimate. Core CPI, which excludes food and energy, increased 2.6% year over year and was unchanged for the month. June’s producer price index also came in below expectations. Why did traders care? Because the softer data eased fears of further Federal Reserve rate hikes. Treasury yields dropped, and the dollar index fell half a percent during the week to 100.48.
That backdrop usually helps risk assets such as Bitcoin. Not this cleanly. Sellers already inside the market are pushing the other way. Glassnode classifies wallets that have held Bitcoin for at least five months as long-term holders, or LTHs. Some bought near last year’s highs and are now selling at a loss, using the rally to escape without swallowing the steeper losses they faced below $60,000. I’ll be honest: that hardly looks like confidence. They prefer a smaller hit today over waiting for a full recovery that may never arrive.
Short-term holders, or STHs, are selling too. Many bought near the recent lows and are now collecting more than $4 million in daily profits. Bitcoin saw a similar setup in May, when it briefly reached its 200-day average above $82,000 before meeting resistance. The motivations differ. The market impact does not. LTHs are cutting losses; STHs are cashing out. Together, they are creating heavy supply between the current price and $66,000.
“As price rallies toward $66k, LTH realized loss volume is spiking,” an analyst said. According to the analyst, buyers who entered near the cycle’s top are using the rebound to escape with smaller losses than they faced below $60,000. Most guides frame long-term holders as the patient money. Counter to that familiar view, some underwater LTHs appear to have simply had enough. Recent buyers are piling on by taking profits at levels last seen near the May peak. My read: conviction is thinner than the price chart suggests.
What this means
Cooling inflation and a weaker dollar would usually leave Bitcoin more room to climb. Yes, that sounds bullish. It is—but only from the macro side. Inside the market, long-term holders are accepting losses around $64,532.45 rather than waiting to break even, while recent buyers have profits worth taking. Why does that matter? Because another price increase may trigger fresh selling almost immediately. I would not call the setup broken, but it is plainly uneasy.
Keep an eye on $66,000. Coins held by both long-term and short-term investors seem to be gathering around that level, making it difficult to clear. Is that resistance automatically fatal? No. Bitcoin needs enough new buyers to absorb those sales and keep the price above $66,000. Without them, it may drift sideways again or fall back toward its recent lows. The Federal Reserve’s next FOMC meeting adds another test: hawkish comments could lift yields and the dollar, stripping away some of the support behind this week’s bounce. My take: $66,000 matters more than the inflation headline now.