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#夏日创作营 ARK Invest: BTC’s drop diverges from whale accumulation, with market showing signals of a cycle bottom
On July 17, Cathie Wood’s ARK Invest published its latest issue of The Bitcoin Quarterly Q2 2026 report, stating that Bitcoin fell by about 14% in Q2, with the year-end closing price at around $58,544. It broke below all major price benchmarks, including the realized price for short-term holders at $70,327, the 200-day moving average at $75,371, and the on-chain average cost basis at $76,660. ARK Invest used “seller exhaustion” to describe the current market condition in the report, while warning that the Bitcoin reserves (DAT) company is facing worsening financing pressure.
Price is down, but long-term holders add more against the trend
The most attention-grabbing set of data in the report is the clear divergence between price performance and the coin-custody (coin supply) structure. Long-term holders of Bitcoin who have held at least 155 days saw their holdings rise to an all-time high of 14.85 million BTC at the end of Q2, up by about 310,000 BTC compared with the end of Q1—meaning that while the price declines by 14%, long-term holders are absorbing the sell pressure from short-term investors. ARK Invest views this combination—“prices falling while strong hands continue to accumulate”—as a signal that the market is reallocating holdings internally, not merely a sell-off stampede.
On-chain data also released signals approaching the cycle bottom: the share of Bitcoin supply in a loss state rose to about 54%, the first time it has exceeded the profitable supply share of 46% in history; realized losses briefly surpassed realized gains, compressing the profit/loss ratio to about 0.82.
ARK Invest pointed out that the combination of “loss supply exceeding profit supply” together with “loss speed outpacing profit-taking speed” historically tends to cluster near the bottom of market cycles or around capitulation phases. Notably, even as price faced pressure, realized volatility remained relatively mild, reflecting that the market structure has matured and become more orderly than in earlier cycles.
A clear crack appears on the institutional side
If on-chain data sends more optimistic signals, the institutional-side data is clearly more bearish. Strategy’s STRC preferred shares at one point dropped sharply from the $100 par value to about $74.57 at the end of June, and closed near $85 at quarter-end. ARK Invest believes that this persistent discount to par value reflects worsening financing conditions for Bitcoin reserve companies, and that rising financing costs may limit their ability to continue accumulating Bitcoin in the future.
Meanwhile, US spot Bitcoin ETFs saw seven consecutive weeks of net outflows in Q2. The cumulative outflow amounts to about 70k BTC—this is the first time these ETF products have experienced such a sustained outflow since launch. ARK Invest believes that ETF outflows are weakening a key marginal buy-side source that had long supported Bitcoin prices. However, the report also mentions a relatively neutral signal: the three-month futures basis still remains slightly positive at about 2.3%, meaning it has not turned into a discount (backwardation to negative), which indicates that the derivatives market has not shown panic and bearish sentiment.
How to understand this “divergence”
Putting these data sets together, ARK Invest’s picture is not simply a “bear market” or “bull market,” but a typical feature of a cycle turning point: weak price performance, a clear retreat in institutional marginal buying (ETFs, DAT companies), yet at the same time the most steadfast on-chain holders keep adding against the trend; the share of loss-laden coins hits a new cycle high; and seller sentiment is nearing the edge of exhaustion.
ARK Invest emphasizes that history shows that the combination of “clear divergence between price action and long-term holder behavior” often becomes an important observation signal for turning points in market cycles—but the report also cautiously notes that this is only a reference based on historical patterns, and does not mean the bottom has been confirmed.
Things that should be viewed rationally
Any single institution’s report has limitations in its analytical framework. On-chain data reflects “facts that have already happened,” and it cannot guarantee that the same pattern will repeat in this cycle. ETF outflows and DAT companies facing financing pressure suggest that institutional confidence may still take time to recover, and a single report cannot instantly reverse a trend.
For ordinary investors, this report provides more of an “observation framework”—such as the share of coins in profit/loss, changes in long-term holder positions, and ETF fund flows—rather than a direct buy/sell signal that can be copied and pasted. $BTC
On July 17, Cathie Wood’s ARK Invest released its latest edition of The Bitcoin Quarterly Q2 2026 report, pointing out that Bitcoin fell by about 14% in the second quarter, with the closing price at roughly $58,544 at quarter-end—breaking below all major price benchmarks, including the realized price of short-term holders at $70,327, the 200-day moving average at $75,371, and the on-chain average cost basis at $76,660. ARK Invest used “seller exhaustion” to describe the current market condition in the report, while warning that the Bitcoin Depositary (DAT) company is facing worsening financing pressure.
Prices are down, but long-term holders keep adding against the trend
The most eye-catching set of data in the report shows a clear divergence between price and the chip (position) structure. Long-term holders of Bitcoin—those holding at least 155 days—had their holdings rise to a record high of 14.85 million BTC by the end of Q2, up by about 310,000 BTC from the end of Q1. This means that while prices are down 14%, long-term holders are absorbing sell-offs from short-term investors. ARK Invest views this combination of “prices falling but strong hands continuously increasing holdings” as a signal that the market is internally redistributing coins, rather than a simple selling panic.
On-chain data also releases signals approaching a cycle bottom: the share of Bitcoin supply in a loss state rose to about 54%, the first time in history it exceeded the 46% of profitable supply. Realized losses briefly surpassed realized gains, compressing the profit/loss ratio to about 0.82.
ARK Invest noted that the combination of “loss supply exceeding profit supply” together with “loss speed outpacing profit-taking speed” historically tends to cluster near the bottom of market cycles or around the capitulation phase. Notably, despite price pressure, realized volatility has stayed relatively mild, reflecting a market structure that is more mature and orderly than in earlier cycles.
Clear cracks on the institutional side
If the on-chain data delivers a somewhat optimistic signal, the institutional-level data is clearly bearish. STRC preferred shares under Strategy fell sharply at one point from a $100 par value to about $74.57 at the end of June, and closed around $85 at quarter-end. ARK Invest believes that the persistent discount to par value reflects worsening financing conditions for Bitcoin reserve companies, and that rising financing costs may limit their ability to keep accumulating Bitcoin in the future.
Meanwhile, US spot Bitcoin ETFs saw net outflows for seven straight weeks in Q2, with a cumulative outflow of about 70k BTC—marking the first time since these ETF products launched that such a sustained outflow cycle has occurred. ARK Invest believes that ETF outflows are weakening an important marginal bid source that had long supported Bitcoin’s price. However, the report also mentions a relatively neutral signal: the three-month futures basis remains at around a small positive 2.3%, and has not flipped into backwardation, suggesting that the derivatives market has not shown panic-driven bearish sentiment.
How to interpret this “divergence”
Putting these data points together, ARK Invest’s picture is not simply a “bear market” or “bull market,” but a typical feature of a cycle turning point: weak price performance, a clear retreat in institutional marginal buying (ETFs, DAT companies), yet at the same time the most steadfast on-chain holders are adding against the trend, the share of loss-making coins hits a cycle high, and sell-side sentiment is near the edge of exhaustion.
ARK Invest emphasizes that historical data shows this combination—“a clear divergence between price action and long-term holder behavior”—often becomes an important observation signal for turning points in market cycles. But the report also cautions that this is only reference based on historical规律, and it does not mean the bottom has been confirmed.
Things that need to be viewed rationally
Any single institutional report has limitations in its analytical framework. On-chain data reflects “facts that have already happened,” and cannot guarantee that the same pattern will repeat in this cycle. ETF outflows and worsening financing pressure for DAT companies suggest that institutional confidence may still take time to recover; it is not something a single report can immediately reverse.
For retail investors, this report provides more of an “observation framework”—the proportions of profitable/loss supply, changes in long-term holders’ positions, and ETF fund flows—rather than a buy/sell signal that can be applied directly. $BTC