Bitcoin stalls despite strong market activity across traditional assets

• Bitcoin remained largely unchanged as stocks reached new highs, highlighting its disconnect from broader global market momentum.
• The Coldcard wallet theft triggered the movement of roughly 119,000 dormant Bitcoin, yet the activity generated no selling pressure.
• Bitcoin is showing characteristics seen at previous market bottoms, but the recovery lacks the institutional demand that fueled earlier rebounds.

Bitcoin (BTC) remained subdued while stocks edged higher and gold lower, suggesting the market is trapped between weakening institutional demand and growing signs of seller exhaustion, according to a Glassnode report on Wednesday.

The firm stated that Bitcoin's lack of movement stood in sharp contrast to broad gains across global markets, as major equity indexes reached new highs and gold extended its rally.

"Everything has moved except the asset this report is about," Glassnode wrote.

Bitcoin faced little pressure following Coldcard wallet theft

The report examined the market's response to the compromise and theft of funds from several self-custodied Coldcard hardware wallets. While the theft triggered notable on-chain activity, it produced almost no impact on BTC's price.

Following the incident, the movement of BTC that had remained dormant for at least a year rose to 119,000 BTC over three days, around 200 times the amount stolen, as wallet holders moved funds to new addresses out of precaution.

However, only about one-tenth of those BTC reached exchanges, while new wallet creation returned to normal within days. At the same time, the supply held in wallets younger than one month continued rising, indicating users were simply migrating assets into fresh cold storage rather than selling.

"The largest forced movement of old coins this cycle produced no measurable sell pressure and no discernible price response," Glassnode stated.

Bitcoin lacks strong demand push amid sign of market bottom

The report noted that Bitcoin is beginning to display characteristics associated with market bottoms, although unlike previous cycles. These signals are forming through prolonged inactivity instead of panic selling.

Historically, major bottoms have been marked by sharp price declines and volatility spikes. This time, profitability has compressed gradually during months of sideways trading while volatility has remained unusually low.

Glassnode stated that its Seller Exhaustion Constant has fallen to the lowest level of the current cycle and entered the range where previous market bottoms formed. However, the indicator still remains about one-third above the levels reached during earlier bear market lows.

Institutional demand remains a missing catalyst

Glassnode also highlighted continued weakness in institutional demand. The report stated that US spot Bitcoin exchange-traded funds (ETFs), along with corporate treasury buyers, have collectively failed to provide meaningful support in recent months. June alone recorded roughly 65,800 BTC in net ETF outflows, the largest monthly withdrawal on record, while corporate treasury purchases were insufficient to offset those redemptions.

"Whatever forms the bottom will have to form without the structural bid that defined the last two years, until that bid turns," Glassnode added.

Despite the subdued outlook, the firm noted that options markets remain unusually calm. Upside implied volatility has fallen to its lowest level on record, while downside volatility remains relatively ordinary, indicating traders are paying for neither bullish nor bearish scenarios.

While deeply compressed markets have historically broken higher, Glassnode stated that Bitcoin's current setup lacks the level of demand that fueled previous recoveries.

Bitcoin is trading at $64,900, up 1% in the past 24 hours at the time of writing.