Sign of the week: Wallets with less than 1 BTC recorded their largest accumulation since the end of 2023. Over the last month alone, they added almost 11,000 BTC, matching the amount accumulated by whale wallets with between 1,000 and 10,000 BTC during the same period. Historically, retail purchases tend to accelerate during the later stages of bear markets.
The index was down slightly this week as Bitcoin price recovered to $64,000 amid weak US employment data and Bitcoin accumulation. At the same time, multiple signals are accumulating that historically appear near bear market lows, but the market has not yet confirmed a bottom.
About the Bitcoin Impact Index
The Bitcoin Impact Index measures which groups of Bitcoin holders are under financial stress, how severe that stress is, and whether it is severe enough to shake confidence in the direction of the market. It combines on-chain holder behavior, ETF and derivatives activity, and exchange-level liquidity flows into a single weekly score between 0 and 100. Unlike sentiment indicators, it deliberately excludes social media and volume data to focus on what participants do rather than what they say.
Scoring bands:
- Normal rotation (0–24) — routine profit taking, without structural change
- Elevated Repositioning (25–49) — specific groups changing position, uneven pressure across the market
- High impact (50–74) — widespread tension between multiple groups of holders and institutional flows simultaneously
- Critical Hit (75–100) — total capitulation: LTH losses, large ETF outflows, major liquidations and strong currency inflows at the same time
Week 28 (July 6-12): BII 42.3: Elevated Repositioning
Positive signs: Retail buyers and institutions are returning
Shrimp, or wallets with less than 1 BTC, have been steadily accumulating during the current bear market. adding around 34,000 BTC so far this year. More recently, however, its purchases have accelerated markedly. Over the last 30 days, these smaller holders, often seen as representatives of retail investors, increase their balances at more than 11,000 BTC – the largest monthly accumulation since the end of 2023.
Notably, this coincides with the increase in net balance and potential accumulation of whale wallets (with between 1,000 and 10,000 BTC) during the same period. However, while whales’ balances can fluctuate significantly from day to day, shrimp tend to build up much more gradually. Therefore, achieving a comparable increase reflects unusually broad and persistent buying among smaller investors. Historically, Retail participation tends to strengthen during the later stages of bear markets.suggesting that the bottoming process may already be underway.
This view is further supported by Bitcoin ETF spot flows, which turned positive for the first time since early May, recording $197 million in net inflows. While retail investors continue to represent the majority of Bitcoin ETF holders, institutional participation continues to grow. Still, the recent turnaround in flows remains consistent with a recovery increasingly supported by retail demand.
At the same time, the average daily foreign exchange earnings fell to 18,648 BTC, its lowest level since April. This suggests that relatively little Bitcoin is being moved onto exchanges in preparation for the sale, leaving sell-side pressure comparatively light.
Negative signals: losses persist among LTHs
LTH SOPR fell to 0.734, indicating that long-term holders who moved their coins this week did so with some of the deepest losses seen this year. However, long-term holders remain largely inactive when it comes to realizing losses, with most continuing to hold rather than sell. As a result, this dynamic is notable, but unlikely to significantly increase overall market stress.
Meanwhile, net stablecoin outflows deepened to an average of -$194 million per day, the weakest reading since mid-May. This suggests that fresh capital is leaving the cryptocurrency market rather than positioning itself for new purchases.
Long liquidations accounted for 73% of all forced liquidations, indicating that leveraged bullish positions continue to bear the brunt of market deleveraging pressure.
Mixed signals: a group of background signals is forming
SOMETHING NUPL is forming higher lows, while LTH NUPL continues to make lower lows, a pattern that has historically emerged in the later stages of bear markets, as short-term participants begin to stabilize while long-term holders absorb the remaining downside. At the same time, both realized loss impulse and MVRV boost are printing divergences with Bitcoin price, suggesting that selling pressure and valuation stress are easing.
None of these signals individually guarantee a fund. But they are coming as a group, which is how Bitcoin’s previous cycle lows have historically accompanied them.
What could happen next?
Bitcoin is located next to the 200-week SMA and the middle band of the daily Bollinger Channel, both near $62,500. This area has been tested repeatedly in recent weeks with neither side winning decisively. A sustained hold above this level could open the way towards $68,000, where the cost base for the short-term holder lies. Crossing that level would return recent buyers to profit and significantly reduce overall selling pressure.
In turn, if the bulls fail to hold above $62,500, $60,000 and $58,000 are the next potential support levels. The short-term outlook adds a layer of caution. The daily and weekly time frames mainly show bullish signals, but the four-hour and lower time frames show bearish divergences in MACD and RSI. This suggests that a short-term correction or period of limited bullish momentum is possible before any sustained recovery consolidates.
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