A bill is being pursued in the U.S. Congress that would require the federal government to hold bitcoin seized in law enforcement operations instead of auctioning it. Republican Representative Nick Begich said the proposal, called the American Reserve Asset Modernization Act, aims to replace the practice of immediate sales. He argued bitcoin could serve as a reserve asset because of scarcity and a dispersed ownership base, and described it as insurance against potential dollar depreciation.

Long-term holders now control 79 percent of bitcoin in circulation, an on-chain signal K33 said resembles patterns seen near major bear market bottoms. The firm pointed to a sharp drop in movements of older coins and easing outflows from spot bitcoin ETFs. It also said about 50 percent of supply was in loss territory last week, a level historically seen only shortly before bear market lows, though further declines often occur before rebounds.