Bitcoin nears cycle bottom despite $8B ETF outflows

Bitcoin nears cycle bottom despite $8B ETF outflows

Bitcoin is currently trading at $64,099.20, showing a recovery from its dip below $60,000. However, concerns still linger in the market. James Butterfill, Head of Research at CoinShares, recently pointed out three main headwinds facing Bitcoin.

Geopolitical and Macroeconomic Pressures

One major issue is the shaky ceasefire between Iran and Israel, which hasn’t eased fears of a new Middle East war. This uncertainty adds pressure on risk assets like Bitcoin. Additionally, the minutes from the latest Federal Reserve meeting revealed that interest rates remain unchanged at 3.50% to 3.75%. The Fed’s top concern is inflation, driven by tariffs, disruptions around the Strait of Hormuz, and strong demand for AI. Core PCE inflation stood at 3.3% in April and an estimated 3.4% in May. With the U.S. unemployment rate at 4.2% in June, down from 4.3% in May, policymakers have little reason to loosen monetary policy.

Signs of a Potential Bottom

Despite these obstacles, Butterfill sees preliminary signs that Bitcoin might be nearing a cycle bottom. One key indicator is the record streak of outflows from Spot Bitcoin ETFs, which saw net outflows of about $8 billion over the past eight weeks. However, recent inflows over the last three trading sessions suggest that institutional selling pressure may be easing. Another positive sign is that concerns about Strategy’s Bitcoin sales have diminished. A large sale of 3,588 BTC in early July had little market impact, and Bitcoin eventually rose toward $63,800.

Regulatory and Market Sentiment

On the regulatory front, hopes for the CLARITY Act are fading, as it still awaits a Senate floor vote. If approved, it could push Bitcoin to new heights. Butterfill summed up the situation by saying the market remains under pressure, but not broken.

Looking at the $BTC Cost Basis Distribution Heatmap, the $77,000 cost-basis cluster has turned into a significant resistance zone after supporting prices in April and May. A larger supply cluster around $84,000 to $85,000 also represents overhead resistance, as many holders might sell at break-even. On the positive side, new accumulation in the $60,000–$63,000 range suggests buyers are establishing a fresh support base. Overall, Bitcoin remains below key historical cost-basis levels, indicating cautious sentiment. A sustained buying push above $77,000 would improve the bullish outlook.