Two Groups of Bitcoin Holders Are Selling Into the Rally — And It Could Cap the Next Price Surge

Bitcoin’s bounce toward 65,000 is meeting a wall of selling from two very different groups of investors, and the pressure could determine whether the rally survives the summer.

By Sarah Park | July 16, 2026

The Hook: A Rally With an Exit Door

Bitcoin climbed to nearly 65,000 this week, lifted by the coolest U.S. inflation reading in years. The June Consumer Price Index rose just 3.5 percent year-over-year, well below what economists expected. That data pushed the dollar lower and sent risk assets higher across the board.

But underneath the celebratory headlines, blockchain data reveals something more cautious. Two distinct groups of Bitcoin holders are using the price jump to sell, according to on-chain analytics from Glassnode. And their combined selling pressure is creating an invisible ceiling just as the market tries to break out.

For regular investors, this matters because it tells you who is actually driving the market right now. It is not just about macroeconomic headlines or ETF flows. It is about whether the people already holding Bitcoin believe the recovery is real or see it as a chance to get out.

On-Chain Evidence: Long-Term Holders Are Capitulating

The first group selling into the rally is the most surprising: long-term holders. These are wallets that have held Bitcoin for at least five months, as defined by Glassnode. Many of them bought near the cycle highs last year and have been sitting on heavy losses ever since.

Instead of waiting for a full recovery, these investors are using the bounce to exit at a smaller loss than they would have faced when Bitcoin traded below 60,000. Analysts describe this pattern as “exhausted conviction” — the moment when underwater holders give up waiting for a return to their buy-in price and decide to cut their losses during a relief rally.

This is significant because long-term holders are traditionally the bedrock of the Bitcoin market. They are the investors most likely to hold through volatility. When they start selling into strength rather than holding for recovery, it signals that confidence has been genuinely shaken.

The Core Conflict: Short-Term Traders Cashing Out Too

The second group selling is more predictable but equally important. Short-term holders who bought Bitcoin near the recent lows around 61,500 are now taking profits at a pace exceeding four million USD per day in realized gains. This selling wave matches patterns last seen in May, when Bitcoin briefly rallied to its 200-day average above 82,000 before pulling back.

The result is that both sides of the market — the patient long-term holders and the opportunistic short-term traders — are pushing sell orders at the same time. That creates what traders call “overhead supply”: a steady stream of selling that makes it harder for the price to push through key resistance levels, even when the broader news environment is positive.

Think of it like trying to fill a bucket with a hole in the bottom. New money from ETFs and retail buyers is pouring in at the top, but existing holders are draining out through the bottom. The water level rises only if the inflow outpaces the outflow.

• Long-term holders — selling at a loss, using the rally as an exit. Signals shaken confidence.
• Short-term holders — taking profits at over four million USD per day. Matches May selling intensity.
• Combined effect — overhead supply that could stall the rally near 65,000 to 66,000.

Market Implications: Inflation Tailwinds Meet Geopolitical Headwinds

The selling pressure would be less concerning if the macroeconomic backdrop were clearly positive. But the situation is more complicated than the headline CPI number suggests.

Yes, June inflation cooled meaningfully. The Consumer Price Index posted its largest monthly decline since April 2020, driven largely by a roughly ten percent drop in gasoline prices through June. That pulled the year-over-year rate down to 3.5 percent, below the 3.8 percent consensus forecast. The cooler data slashed expectations for Federal Reserve rate hikes, with the probability of a July hike dropping from 43 percent to just 13 percent, according to futures markets.

But some analysts argue the inflation data is already outdated. Ryan Lee, chief analyst at Bitget, noted that the June CPI was driven by falling oil prices, and that move has already reversed. Oil prices have bounced back to a one-month high as military tensions around the Strait of Hormuz escalate. “Markets are rallying on a June photograph, while July develops differently,” Lee said. The July inflation print will be the first to capture what analysts call the “war premium” on energy costs.

The Fear and Greed Index, a popular sentiment gauge, moved from 22 to 25 — still deep in “Extreme Fear” territory despite the price bounce. Jasper De Maere, an over-the-counter trader at Wintermute, put it bluntly: one soft CPI print against an active military escalation is not the same as a durable shift in risk appetite.

The Verdict: A Fragile Recovery Under Pressure

For investors trying to make sense of this moment, the key takeaway is that Bitcoin’s rally to 65,000 is not as sturdy as it looks. The price has risen on the back of a single favorable inflation report, but the people who actually hold Bitcoin are using that rise to sell. That is not the behavior you see at the start of a sustained bull run.

The good news is that some structural indicators remain healthy. Funding rates are near zero, meaning the overleveraged positions that fueled June’s cascading liquidations have been cleared. Exchange outflows have held steady through the geopolitical turbulence, with no meaningful rotation into stablecoins — the move that typically signals investors heading for the exits. Bitcoin dominance stands at 58.3 percent, suggesting capital is not fleeing to altcoins.

The market is at a crossroads. If ETF inflows continue and the selling from both holder groups slows down, Bitcoin could push through the 66,000 resistance and target higher levels. If the selling intensifies — particularly if July inflation data comes in hot due to rising energy costs — the overhead supply could overwhelm the bid and send Bitcoin back toward the low 60s.

For now, the smartest approach is patience. Watch whether the relief rally holds above 63,000 in the coming days. Watch whether ETF flows stay positive for a second consecutive week. And watch the Fear and Greed Index for signs that sentiment is genuinely recovering, not just bouncing off historic lows.

The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.