Bitcoin’s rare buy signal faces a test as miner selling continues
Mining firms such as RiotPlatform and Mara Holdings, Inc., have been selling their BTC holdings, likely to cover rising overhead costs.
Bitcoin [BTC] has climbed above the $62k mark and is trying to move higher. According to data from Farside Investors, July 2 saw Bitcoin spot ETF inflows of $223.5 million.
This comes after nearly two weeks of capital outflow from ETFS. The shift in investor confidence helped explain Thursday’s 2.56% upward move. At the time of writing, this short-term bounce was underway, and the $64k local resistance zone is the immediate target.
Weaker-than-expected U.S. jobs data fueled expectations that the Fed would lower interest rates, helping to explain the short-term price bounce.
Is Bitcoin giving an early buy signal?
Crypto analyst Axel Adler Jr. drew attention to the Bitcoin Advanced Net UTXO Supply Ratio chart. This metric measures the net balance of BTC supply in profit and in loss. The ratio dropped deep into negative territory in recent weeks, resulting in the green “BUY” signal printed on the chart.
It was the first buy signal since November 2022. Back then, the signal’s turnaround came alongside the market bottom and a recovery from the cyclical lows.
This time around, confirmation would be if the ratio holds its ground above zero, and the Bitcoin price continues to climb higher in the coming weeks.
The threats looming for Bitcoin investors
AMBCrypto reported that mining firms such as RiotPlatform, Mara Holdings, Inc., and Hut 8 Mining Corp. have been selling their BTC holdings. It was a response to increasingly expensive mining operations, adding to the bearish strain on the market.
Analyst Crypto Onchain pointed to the heavy uptick in miner outflows to suggest that these entities were selling their holdings to cover operational costs. This idea holds up with the data presented earlier.
Additionally, the Binance stablecoin netflows averaged -$126 million per day, while funding rates remained positive. The combination of these factors showed smart money, and miners were selling spot holdings while smaller retail players tried to “catch the knife” and buy the dip.
Historically, legacy spot supply entering the market at a time when smaller market participants provided long leverage tended to precede sustained price drawdown and a long squeeze, the analyst concluded.
Final Summary
- The Advanced Net UTXO Supply Ratio chart for Bitcoin flashed a buy signal for the first time since November 2022, when the signal marked a cyclical bottom.
- The increasing retail long leverage alongside smart money offloading spot holdings indicated potential for a deeper price drop later in 2026.
