Bitcoin recently closed at $58,500, its lowest point of the quarter, and the explanation most analysts reached for was macro pressure, ETF outflows and institutional fear. Gareth Soloway, Chief Market Strategist at Verified Investing, has a different read that most people have not considered. A significant portion of last week’s selling had nothing to do with Bitcoin’s fundamentals and everything to do with fund managers cleaning up their quarterly statements.
The Window Undressing Nobody Talked About
At the end of every quarter, institutional money managers make their portfolios look presentable before sending statements to clients. They buy what worked and quietly dump what did not. Bitcoin ETFs, sitting on painful quarterly losses, became an obvious candidate for removal from those statements before clients got to see them.
Bitcoin fell while AI-related stocks like SanDisk surged nearly 11% in a single day. The first day of Q3 told the same story in reverse. SanDisk began selling off immediately as the new quarter opened, while Bitcoin held flat despite a stock market pointing lower. The institutional selling pressure that weighed on Bitcoin through the final days of June may already be clearing.
Bitcoin is currently up by more than 5%.
A Technical Milestone Most Are Missing
Beyond the quarter-end mechanics, Soloway identified something more structurally significant on the chart that has gone largely unnoticed in mainstream coverage.
Bitcoin has officially moved into what he calls Stage Two of the bear market, and that is actually a more positive development than it sounds.
Stage One of a bear market is the period spent below the primary downtrend line connecting lower highs from the all-time high. Bitcoin spent months trapped in that phase. Stage Two begins when the price breaks above that trend line, even if it subsequently continues lower. That transition signals the bear market is no longer in its early phase. The market is in the back half, closer to the end than the beginning.
The Head and Shoulders Question
Many technical analysts looking at Bitcoin’s current chart are flagging a head and shoulders pattern, a formation typically associated with further downside. Soloway offered a nuance worth understanding before drawing conclusions from that setup.
The most reliable head and shoulders patterns have horizontal or slightly upward-sloping necklines. Bitcoin’s current formation has a downward-sloping neckline, which historically reduces the probability of the pattern completing successfully to roughly 50/50 at best, compared to the 65% to 70% probability that horizontal or upward-sloping versions carry. It may still work out. It is simply not the high-conviction bearish signal it is being treated as.
Where Does Bitcoin Go From Here
A relief rally is possible and the clearing of quarter-end selling pressure gives that scenario more room to develop. However, if Bitcoin breaks decisively below current support, the next meaningful flush could target the low $50,000 range, a level that aligns with broader technical support on higher timeframes.
The more important takeaway for anyone tracking this market is that the relentless institutional selling that characterised the final weeks of Q2 may now be behind us. Whether that is enough to generate a genuine July rally, as seasonal patterns suggest is likely, or whether one more leg lower arrives first, is the question Q3 will answer.
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