Stock markets may be anxious, but institutional money is flowing heavily into crypto. Over the last five trading days, spot Bitcoin ETFs in the United States drew in inflows of $854 million. This figure marks the best weekly period since April, breaking a stagnant trend that had overshadowed the market for weeks.
Bloomberg ETF analyst Eric Balchunas ranked this achievement as the third strongest week since October last year. Interestingly, the fresh cash flows entered daily, coinciding with the Coldcard wallet exploit incident that drained the assets of several users. While hardware wallets were compromised, the institutional gateway through ETFs opened even wider.
Impact of Widely Missed Jobs Data
The main catalyst behind this capital shift came from the US real sector. Throughout July, the country’s economy actually lost 23,000 jobs. This report missed drastically from economists’ initial expectations, which projected an addition of 80,000 to 95,000 jobs. This count marks the worst labor data in recent months.
The sluggish labor data immediately slashed projections for the Fed’s monetary policy. According to the CME FedWatch tool, the probability of the central bank raising interest rates in September plunged from 67% to 42%, before ticking up slightly to 46% on Monday. The diminishing threat of high interest rates has lured capital back into risk assets. Not only Bitcoin, but Ethereum ETFs also recorded larger inflows when calculated proportionally to their market capitalization.
Price Direction Remains Muted
Although the money flow data looks convincing, the price chart has not yet confirmed an upward trend. This morning, Bitcoin was trading in the range of $65,100, recording a mere 0.4% gain. From a technical standpoint, the asset remains trapped in a “death cross” pattern - a condition where the 50-day moving average slides below the 200-day line.
CoinShares data shows accumulation by the “whale” group for three consecutive weeks. However, analysts read this situation through a different lens. Tim Sun from HashKey assesses that the ETF inflows are not a signal of a market trend reversal. He considers this phenomenon to be driven more by portfolio rebalancing activities of investment managers and basis trading.
A different view comes from CoinShares analyst James Butterfill. He believes that the price bottom cycle has most likely passed. However, he also reminds investors that this is not a guarantee that the price will immediately rally strongly. He predicts that Bitcoin’s movement will still be held within the current price range for the next two to three months, with a gradual trajectory toward the $80,000 mark.
For day traders, money coming in from Wall Street serves as a cushion amid macroeconomic uncertainty. However, as long as technical indicators have not changed direction, even large institutional flows will not necessarily immediately lift retail prices tomorrow.
Reported from Decrypt.
Also read: What Is Bitcoin Halving?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
