Bitcoin nears cycle bottom despite record $8B Spot ETF outflows – Why?

At press time, Bitcoin [BTC] was trading at $64,099.20, indicating a recovery from the decline below the $60k mark, but there are still concerns lingering. CoinShares’ Head of Research, James Butterfill, in his recent report, emphasized the three-front headwind facing Bitcoin.

One of the main issues, according to Butterfill, is the shaky ceasefire between Iran and Israel, which hasn’t done much to allay worries about a new Middle East war. He said, AD In markets like this, the turn often begins when forced selling is exhausted rather than when the headline backdrop improves. Concerns were further heightened by the minutes of the most recent Federal Reserve meeting, which concluded that interest rates remained unchanged at 3.

50% to 3.75%. Because of tariffs, disruptions around the Strait of Hormuz, and robust demand for AI, the Fed’s top concern remained inflation, with core PCE inflation at 3.

3% in April and an estimated 3.4% in May. However, there was little justification for policymakers to loosen monetary policy, as the U.

S. unemployment rate was 4.3% in May and then decreased to 4.

2% in June. Is Bitcoin nearing the bottom? Butterfill, however, finds preliminary indications that Bitcoin might be approaching a bottom despite these obstacles.

The reason behind this is that the Spot Bitcoin ETFs have experienced the longest withdrawal streak on record, with net outflows of about $8 billion over the last eight weeks. However, recent inflows over the past three trading sessions indicate that institutional selling pressure might be lessening. Source: Farside Investors Meanwhile, there are no longer as many worries about Strategy’s Bitcoin sales.

A much bigger sale of 3,588 BTC in early July had little effect on the market, with Bitcoin eventually rising toward $63,800. Regarding regulations, Butterfill notes that there is waning hope for the CLARITY Act, which is still pending a Senate floor vote. The approval is further predicted to push Bitcoin to new heights.

Hence, Butterfill concluded it best when he said, The market remains under pressure, but not broken. Final Summary Meanwhile, the BTC Cost Basis Distribution Heatmap displays that the $77k cost-basis cluster has now become a significant resistance zone after supporting prices in April and May. Source: Glassnode Since many holders might sell at break-even, a much larger supply cluster around $84k to $85k also represents significant overhead resistance.

Meanwhile, new accumulation in the $60k–$63k range indicates that buyers are establishing a new support base. While sustained buying above $77k would improve the bullish outlook, overall, Bitcoin is still below significant historical cost-basis levels, indicating cautious sentiment. Final Summary Middle East tensions and the 3.

50% to 3.75% Fed rate are playing a major role behind Bitcoin’s weak momentum. Spot Bitcoin ETF outflows and the BTC sell-off by Strategy suggest that Bitcoin might be nearing its bottom.

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