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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, and there are predictions that quarter-end portfolio rebalancing could be a new catalyst for a short-term rally. However, with institutional investors' spot ETF outflows likely to continue for an eighth consecutive week, analysis suggests that a full trend reversal depends on additional capital inflows.
According to investment news outlet FXStreet on July 3 (local time), Bitcoin dropped 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 total net outflow of $526.64 million by July 3, indicating a potential eighth consecutive week of outflows. The outlet analyzed that institutional demand remains weak and is failing to prevent price declines.
CryptoQuant diagnosed that an increase in exchange inflows suggests greater price volatility in the future. This week, Bitcoin exchange inflows increased to 49,000 BTC per day, with total inflows nearing 50,000 BTC. This is an unusual level, seen only four times this year, and historically, all such instances have led to significant price fluctuations. 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 easing of geopolitical tensions and changes in the macroeconomic environment also influenced Bitcoin's rebound. Qatar's Ministry of Foreign Affairs announced that the U.S. and Iran made positive progress in indirect negotiations held in Doha, and former U.S. President Donald Trump also assessed that negotiations regarding Iran's nuclear program were progressing. Additionally, U.S. non-farm payrolls in June increased by only 57,000, significantly below market expectations of 110,000, which eased concerns about Federal Reserve (Fed) tightening. The market consequently lowered its forecast for benchmark 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. They noted that in about half of the cases over the past 18 months, when Bitcoin underperformed compared to the U.S. stock market, ETF inflows tended to increase at the end of the month and the beginning of the next month. However, they cautioned 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, whereas Dean Chen, an analyst at Bitunix, opined that quarter-end rebalancing is merely a reallocation of existing funds rather than a new inflow, which might 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 occur. 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) is 44, indicating 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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