Bitcoin ETFs See $342.2 Million Outflows as Traders Turn Cautious

Bitcoin traders have adopted a defensive stance as the 15-day streak of inflows into US-based spot Bitcoin exchange-traded funds (ETFs) came to an end on July 1. Over $342.2 million in ETF outflows were recorded on that day, indicating a shift in trader sentiment. This defensive approach is further supported by muted market activity and the return of spot BTC ETF outflows, with Bitcoin remaining stuck in a $4,000 range.

The outflows were observed across four major funds: Fidelity Wise Origin Bitcoin Fund, Grayscale Bitcoin Trust ETF, ARK 21Shares Bitcoin ETF, and Bitwise Bitcoin ETF. These funds saw outflows of $172.7 million, $119.5 million, $27 million, and $23 million, respectively. This shift in ETF flows suggests that investors are becoming more cautious, with leveraged ETFs also seeing modest activity and no material flows in leveraged instruments.

K33 Research noted that the limited leveraged ETF flows signal low leverage and modest yields, suggesting a limited immediate risk of leveraged-driven market squeezes. This cautious sentiment is also reflected in the crypto futures market, where activity has remained muted. BTC Binance futures annualized premiums dropped to a 21-month low of 3.9% on July 1, and CME’s crypto futures saw annualized BTC premiums drop to an 8-day low of 6.5% on June 30. This reflects reduced institutional interest or confidence in a near-term Bitcoin price surge.

Bitcoin’s open interest has also declined by 35,560 BTC over the last week, remaining well below May’s highs. Singapore-based trading firm QCP Capital explained that although the option markets have shown a modest uptick in BTC risk reversals over the last 24 hours, implied volatility remains near all-time lows. The firm noted that basis and yields continue to reflect soft native sentiment, with most positioning now favouring accumulation and range-bound activity.

Many Bitcoin traders are increasingly cautious as BTC continues to tease and retrace, hovering between $105,000 and $108,800 since June 25. Popular Bitcoin analyst AlphaBTC highlighted key levels within this range, noting that if the price reclaims $106,500, it could see a “bigger bounce.” Significant resistance above $109,000, if breached, could push Bitcoin into price discovery. However, AlphaBTC warned that if Bitcoin drops below the lower limit of the range and loses $104,000 with momentum, it could see a deeper correction to sub-$100,000 levels.

Fellow analyst Daan Crypto Trades asserted that BTC’s current consolidation is typical of a “new month and quarter, where we often see a choppy start after which the price chooses a direction later on.” He advised giving it some time to play out and watching for confirmations. As a result, BTC could be consolidating within the current range for a few more days, with fresh demand needed to spark upward momentum.