Bitcoin's July Rally Fades as Institutions Sell 26,000 BTC

Bitcoin began July with a strong upward rally, indicating sustained bullish sentiment among investors following its performance at the end of June. However, this rally lost momentum after the release of positive employment data from the United States, which typically would be seen as bullish for Bitcoin prices. Despite this, on-chain data suggests that a specific group of investors has returned to the market, betting on the world’s largest cryptocurrency by market capitalization.

On-chain analyst Amr Taha highlighted a growing divergence between retail and institutional behavior in the Bitcoin market. Binance Bitcoin futures Open Interest (OI) has remained below $11.5 billion, indicating that this price level has acted as strong resistance. Traders have repeatedly closed positions near this threshold, suggesting that the bullish momentum for Bitcoin may be waning. This resistance level is close to the price region where resistance was observed on June 10th.

In contrast, short-term holders (STH), who are typically retail traders, have increased their exposure to the market by about 382,000 BTC. This indicates renewed retail interest in Bitcoin. Conversely, long-term holders (LTH) reduced their holdings by a similar amount, which could be due to profit-taking or risk management within this investor class. Essentially, retail investors are "buying the dip," while more experienced investors are reducing their risks.

Supporting the idea of caution among institutions and whales, large holders (those with over 10,000 BTC) offloaded about 12,000 BTC on July 3rd. This move signals potential profit-taking or strategic reallocation. Large transactions tend to have a substantial impact on market dynamics due to the significant amounts of BTC involved in each trade. Mid-sized whales (those holding 1,000-10,000 BTC) also sold approximately 14,000 BTC from June 30th, indicating that whales may be in a distribution phase, either anticipating further bearish momentum or awaiting better positioning opportunities.

If macro conditions remain favorable, the Bitcoin market could resume its bullish rally. However, this depends on the renewal of confidence among larger players. As of the latest data, Bitcoin is valued at $108,152, with no significant movement in the past 24 hours. The road ahead remains uncertain, with the market's direction hinging on the actions of larger investors and the overall economic environment.