Market commentator Scott Melker argues that Bitcoin’s (CRYPTO: BTC) prolonged consolidation around $60,000 may represent a bottoming phase, driven by shifting market structure and technical signals. In a podcast on July 31, Melker highlighted that despite significant outflows from spot Bitcoin ETFs and forced selling by major entities, the asset has found support, suggesting a transfer of ownership from short-term retail investors to long-term holders.

Technical Indicators Signal Support

Melker pointed to several technical factors resembling conditions seen near previous cycle lows. Bitcoin recently traded approximately 10% above its July low near $58,000, while investor sentiment remained in the fear zone. Key technical signals include a deeply oversold weekly relative strength index, a bullish divergence, and a recovery above the 200-week moving average. Additionally, the asset bounced near its 50-month moving average, a level historically associated with major accumulation zones.

However, Melker cautioned that Bitcoin has not yet reclaimed key resistance levels and could still revisit the lower end of its trading range.

Forced Sellers Exit the Market

A central theme of Melker’s analysis is the exhaustion of forced sellers. Several digital asset treasury companies, which were previously expected to support prices, have instead liquidated holdings or abandoned accumulation strategies following collapses in their stock premiums.

Strategy (NASDAQ: MSTR), led by Michael Saylor, recently sold Bitcoin to increase cash reserves and manage preferred-stock obligations. Similarly, Bitcoin miners have sold holdings to redirect capital toward AI infrastructure. Despite these entities stepping away as buyers or becoming sellers, BTC prices have remained relatively stable.

"Every supposed buyer of last resort became a forced seller, and Bitcoin is still here," Melker said.

Whale Accumulation vs. Retail Capitulation

The current market dynamic appears characterized by a shift in supply from short-term traders to long-term holders. Spot Bitcoin ETFs recorded significant outflows during the correction as retail investors rotated capital into AI and semiconductor stocks. Conversely, large Bitcoin holders have reportedly resumed accumulating near the $60,000 region after selling into the rally toward Bitcoin’s October 2025 all-time high near $126,000.

Falling exchange reserves further suggest that investors are withdrawing Bitcoin into self-custody rather than preparing to sell, reinforcing the view that supply is moving toward longer-term storage.

Key Market Data Points

What the Numbers Show

The divergence between retail behavior and whale activity suggests a structural change in demand. While retail investors exited via ETF outflows, large holders accumulated near $60,000. This transfer of supply, combined with falling exchange reserves, indicates that the selling pressure from forced entities like Strategy and miners has been absorbed by long-term holders, potentially establishing a floor for prices despite the absence of new retail inflows.

CoinKite, the maker of Coldcard hardware wallets, has halted all shipments and destroyed remaining inventory with vulnerable firmware after a coordinated cyberattack drained approximately 1,367.59 Bitcoin (BTC), worth $86.62 million at current prices. The breach exposes critical vulnerabilities in self-custody solutions, prompting urgent warnings for users to migrate funds immediately to prevent further exploitation.

The incident involves multiple waves of theft targeting the Coldcard wallet ecosystem. According to a live dashboard tracking the exploit, a total of 1,367.59 BTC has been siphoned from linked wallets. Alex Thorn, Head of Research at Galaxy Research, identified that hackers are launching a fourth coordinated attack. This latest wave has already pilfered 388.93 BTC, valued at $24.53 million, from 462 addresses across 218 transactions. Thorn alerted users on X on August 3, 2026, noting that pending transactions in the mempool indicate ongoing siphoning efforts.

Immediate Mitigation Steps

Coldcard confirmed the vulnerability on August 2, 2026, stating it halted shipments upon confirmation of the flaw. The company destroyed all remaining units with the affected firmware installed at its facilities. Customers who had already received orders were contacted directly via email with an advisory and migration steps. "Right now, our full focus is helping affected users migrate safely," Coldcard said.

Thorn urged users to move funds off the Coldcard wallet immediately, recommending high transaction fees to prioritize rescue transactions ahead of the attackers'. He warned that users whose addresses appear in the attack list have only minutes to engage in a fee race to secure their funds.

Industry Response and Risks

Binance co-founder Changpeng "CZ" Zhao highlighted the inherent risks of self-custody in response to the drains. On August 1, 2026, Zhao noted that bug fixes cannot retroactively secure previously generated wallets and that developers have no way to reach users on air-gapped devices. "I'm a believer in self-custody, but it puts the burden on you," Zhao said, emphasizing that wallets remain open to hackers until users manually intervene.

The incident underscores that hardware wallets, which store private keys offline to protect against malware, are not foolproof. Ledger, another major industry player, faced a sophisticated hacking incident in 2023 resulting in the theft of approximately $484,000 in assets. Benzinga reached out to CoinKite regarding safeguards, liability protections, or contingency measures planned following this incident.

Market Impact

At the time of writing, Bitcoin was trading at $63,071.73, down 0.40% in the last 24 hours, according to Benzinga Pro data. The breach raises broader concerns about security protocols in decentralized finance infrastructure.

What the Numbers Show

The concentration of losses in the fourth wave—accounting for nearly 29% of the total drained value ($24.53 million of $86.62 million)—suggests that attackers are actively exploiting the vulnerability in real-time rather than relying solely on initial access. The rapid succession of 218 transactions affecting 462 addresses indicates a highly automated script capable of identifying and draining compromised wallets faster than many users can react, highlighting the critical importance of immediate fee-racing mitigation strategies advised by researchers.