“This move looks more like a short-term relief than a sustained rebound,” said one trader as Bitcoin climbed roughly 13% from its late June low near $58,000 to hover close to $65,000. Despite this bounce, on-chain data reveals a market still weighed down by deep unrealized losses and weakening spot demand, signaling caution ahead.
Data from Glassnode paints a grim picture: unrealized profits plunged from about $1.4 trillion at Bitcoin’s October 2025 peak to just $400 billion by late June, marking the lowest level of the current cycle. Even more concerning, net unrealized losses in June sank lower than during the February crash, though prices were similar at both times. This suggests coins shifted hands amid the sell-off, pushing the average cost basis up and indicating sustained market pain. Losses that linger between $200 billion and $300 billion, as seen throughout most of 2026, resemble protracted capitulation phases from past bear markets.
July offered some respite, with unrealized profits climbing to around $500 billion as losses narrowed. Yet, for a genuine bullish turnaround, profit levels need to surpass the spring high near $580 billion. This recovery, however, is mainly driven by futures traders. CryptoQuant figures show that while perpetual futures demand turned marginally positive in July adding roughly 30,000 to 50,000 BTC the appetite is nowhere near the April surge of about 250,000 BTC that propelled Bitcoin to $82,000. Meanwhile, spot demand continues to shrink, contracting at a rate of about 200,000 BTC per month and hitting a yearly low of nearly minus 550,000 BTC in early June. Historically, rallies fueled mostly by use without strong spot buying have struggled to hold gains.
Bitcoin’s price remains below three of its four key on-chain valuation models, with only the Realized Price at $52,900 providing some floor. The current stretch between the market price and models like the Short-Term Holder cost basis echoes the 2022 bear market dynamics. Bulls are looking to reclaim the $69,500 level, roughly 6% above present prices, as the critical threshold that would push recent buyers into profitability and potentially signal the start of a sustained recovery phase.
