Bitcoin recovers above $64K: Has the Coldcard-driven sell-off ended?

Bearish chatter around Bitcoin [BTC] peaked on the 31st of July as the asset tumbled from a high of $65,409 to $62,466 that same day and slid lower still on the 1st of August.

The gloom has not fully held up, though, and Bitcoin has since rebounded off its low to climb back above $64,000 in the early hours of Tuesday.

There was more behind the sell-off than price action, and much of the bearish mood grew out of concerns over the Coldcard hardware wallet hack.

Short-term holders led Bitcoin’s early sell-off

Short-term holders (STH)—investors who hold Bitcoin for fewer than 155 days—ranked among the first groups to sell, adding to the asset’s recent decline.

Axel Adler’s STH profit/loss-to-exchange metric shows a heavy wave of selling since the start of August, reaching a cumulative -7,336.40 BTC, worth roughly $468.31 million at the time of writing.

A sell-off of this size usually reads as a bearish signal from STH, and it tends to drag the asset lower on the chart.

A closer look at the chart tells a different story, since the selling looks mostly panic-driven, and the latest reading, on the 3rd of August, shows net purchases of roughly 3,150.66 BTC – a sharp turn from the -7,551.09 and -2,935.97 net figures recorded on the 1st and 2nd of August.

The swing back to buying points to early accumulation, which could feed into Bitcoin’s performance in the days ahead.

Bitcoin’s long-term holders share the blame

STH played a leading role in driving Bitcoin lower, yet long-term holders (LTH)—those who hold the asset for more than 155 days—carry some of the weight too.

LTH has booked more profit than STH, according to the Spent Output Profit Ratio (SOPR). The LTH-SOPR to STH-SOPR ratio has surged to a fresh high of roughly 0.9355, climbing steadily since the 21st of July.

A rising ratio signals heavier selling from long-term investors, the cohort that usually holds through volatility and is now offloading into the market.

The market needs this LTH selling to cool down and, ideally, settle into consolidation before it can steady.

Bitcoin’s spot market leans toward profit-taking

The spot market has not welcomed the rebound, and traders have leaned into profit realization across the board as Bitcoin recovered.

Spot netflow stood at a positive $105.7 million at the time of writing, a sign selling outpaced buying over the past 24 hours. Positive netflow has held for 15 straight days, with a reported reading of $84.29 million.

U.S. demand has pulled in the other direction, with the US spot Bitcoin ETFs drawing stronger buying—a daily netflow of $170.09 million on 3 August—and leaning the outlook more bullish.

Bitcoin has staged a relief rally, but the market is not decidedly bullish yet, with some investors still holding back from active buying.

Final Summary

• STHs led the early sell-off but flipped to net purchases of roughly 3,150 BTC on the 3rd of August, a sign panic gave way to accumulation.
• LTHs are realizing more profit, and Spot netflow stays positive, yet $170.09M in ETF inflows keeps the outlook cautiously bullish.