Short-term holders (STH) transferred over 32,000 $BTC to exchanges at a loss, marking one of the largest capitulation waves in the past month. At the same time, analysts are recording a record level of negative sentiment around the first cryptocurrency following the Coldcard hardware wallet firmware exploit.
STH Sell at a Loss, and the Dollar Intensifies Pressure on Bitcoin
According to analyst Darkfost, on August 1, short-term holders transferred over 32,000 $BTC to crypto exchanges at a loss. He stated this is one of the largest waves of loss-making sales in the past 30 days.
He also noted that the process of transferring coins from "strong hands" to "weak hands" continues.
Meanwhile, Glassnode drew attention to Bitcoin's unusually weak reaction to the strengthening US dollar. According to the company's assessment, the American currency has been strengthening since May, and the first cryptocurrency is showing worse performance than in almost any other period of dollar strengthening in observation history.
Analysts emphasized that in all previous cycles since 2015, Bitcoin was significantly more resilient to such a macroeconomic factor. They view a return to this pattern as a positive signal for the market.
July Rally Was Supported by Buyers Outside the US
Bitfinex stated that Bitcoin's recovery in July was real, but its driving force was demand from outside the United States.
According to experts, the Coinbase Premium, considered one of the key indicators of spot demand from American investors, remained negative for a record-breaking more than 60 days. This indicates that Bitcoin's roughly 15% rise from local lows occurred without significant support from US exchange-traded crypto products (ETPs) or corporate Bitcoin reserves.
Despite Bitcoin finishing July in positive territory after the FOMC meeting, Bitfinex considers the situation unstable until the Coinbase Premium returns to positive territory.
Furthermore, CryptoQuant's Head of Research Julio Moreno reported that the daily volume of exchange deposits with transactions of less than 10 $BTC increased to 7,300 $BTC — the highest level since February 6.
In his opinion, this is likely related to the Coldcard hack, which caused users to start moving their assets in search of more secure storage methods.
Panic Around Coldcard Reaches Record Level
Santiment analysts stated that the ratio of positive to negative comments about Bitcoin on X, Reddit, Telegram, and other social networks has dropped to its lowest level in the company's entire modern monitoring history.
According to their data, there are now only 0.58 positive messages for every one positive comment about Bitcoin, indicating the dominance of fear among market participants.
Santiment linked this to the Coldcard firmware exploit, which affected the self-custody sphere of crypto assets. Unlike exchange collapses or DeFi protocol hacks, this time the security of cold wallets — which many investors considered the most reliable way to protect funds — was called into question.
Despite the crypto industry having already experienced larger-scale shocks, in particular the collapses of FTX, Mt. Gox, and "Black Thursday" during the COVID-19 pandemic, the current situation has caused a record surge in negative sentiment among retail investors, added the analysts.
It is worth recalling that in July, Bitcoin rose by 7.36%, closing the month in the "green zone" for the tenth time in history, while Ethereum gained 18.5% despite historically unfavorable statistics for the asset.
