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▲ Bitcoin (BTC) Exchange Traded Fund (ETF) ©Coinreaders
Bitcoin (BTC) has rebounded from a 21-month low, rising over 3% this week, amidst predictions that quarter-end portfolio rebalancing could become a new catalyst for a short-term rise. However, with institutional investors' spot ETF outflows likely to continue for the eighth consecutive week, analysis suggests that a full trend reversal depends on additional fund inflows.
According to investment media outlet FXStreet on July 3 (local time), Bitcoin fell to $57,800 earlier this week, marking a 21-month low, before recovering to $61,800. However, according to SoSoValue's aggregation, Bitcoin spot ETFs recorded a net outflow of $526.64 million by the 3rd, indicating a potential eighth consecutive week of outflows. The media analyzed that institutional demand remains weak and is failing to defend against price declines.
CryptoQuant diagnosed that an increase in exchange inflows suggests expanded price volatility in the future. This week, Bitcoin exchange inflows increased to 49,000 BTC per day, with total inflows approaching 50,000 BTC. This is an unusual level seen only four times this year, and in the past, all such instances led to significant price fluctuations, it explained. CryptoQuant added that if Bitcoin breaks below the key support level of $60,000, it could fall to its realized price of $53,000.
The rebound in Bitcoin was also influenced by easing geopolitical tensions and changes in the macroeconomic environment. Qatar's Ministry of Foreign Affairs announced that the US and Iran made positive progress in indirect negotiations held in Doha, and former US President Donald Trump also assessed that negotiations related to Iran's nuclear program were progressing. Additionally, US non-farm payrolls in June increased by only 57,000, significantly below market expectations of 110,000, easing concerns about the Federal Reserve's (Fed) tightening. The market consequently adjusted its outlook for interest rate hikes in 2026 from the previous 1-2 times to 0-1 time.
K33 Research analyzed that quarter-end portfolio rebalancing could support Bitcoin in the short term. Over the past 18 months, in about half of the cases where Bitcoin underperformed against the US stock market, there was a tendency for ETF inflows to expand at the end of the month and early the following month. However, it assessed that this pattern is not always repeated and is merely one of several factors influencing institutional demand. Ryan Lee, a senior analyst at Bitget, analyzed that ETF fund flows, macroeconomic conditions, and investor sentiment are key variables that will determine Bitcoin's future direction, while Dean Chen, an analyst at Bitunix, stated that quarter-end rebalancing is merely a redistribution of existing funds rather than new inflows, which can increase short-term volatility but is not a factor that changes long-term trends.
Technically, if Bitcoin maintains its upward trendline near $58,000 on a weekly basis, there is a possibility of a rebound to the 200-week Simple Moving Average (SMA) at $62,652 and the 78.6% Fibonacci retracement level at $65,520. Conversely, if the $58,000 support level breaks on the weekly chart, a further decline to $55,777 could open up. On a daily basis, it is trading below the 50-day, 100-day, and 200-day Exponential Moving Averages (EMA), and the Relative Strength Index (RSI) was 44, showing limited buying pressure. The Moving Average Convergence Divergence (MACD) showed signs of improvement, but $64,004 and the 50-day EMA at $66,028 were presented as short-term resistance levels.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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