Weekly Alpha: ETF Flows Turn Positive Again
What’s Happening
Latest Price Action
Bitcoin has had a more constructive week, with price climbing back above the 200 week moving average after briefly losing that level at the start of August. BTC is up +4.37% over the past seven days and is currently trading around $65,200.
Figure 1: BTC past week price action.
Zooming out slightly, Bitcoin is also up +1.66% over the past month. The broader picture remains one of choppy late-stage bear market price action, but importantly BTC has continued to defend the key support region around the 200WMA.
Figure 2: BTC past month price action.
Philip Swift’s Q3 Market Map continues to frame this area well. Bitcoin remains in what he describes as the Great DCA area, with price once again back above the 200WMA. That is encouraging and should help some confidence return to the market.
Figure 3: Bitcoin Q3 Market Map, showing BTC back above the 200WMA and still trading in the Great DCA area.
The next major level to watch remains the 200 day moving average, now around $70,000. A convincing reclaim of that level would be a more meaningful signal that market confidence is starting to return and that Bitcoin may finally be moving out of this prolonged bear market phase.
ETF Flows Turn Positive Again
One of the more encouraging developments this week has been the return of meaningful inflows into U.S. spot Bitcoin ETFs.
After months of heavy selling, the ETFs recorded around $853 million of net inflows over the past week, their strongest weekly total since April.
Figure 4: Bitcoin ETF daily flows showing the recent return of positive inflows.
Some of that demand may be linked to the fallout from the Coldcard security breach, which has reportedly seen more than 1,800 BTC drained from affected wallets. Events like this are an uncomfortable reminder of the operational risks involved in self-custody and may encourage some investors to prefer regulated ETF exposure instead.
But we suspect the bigger driver is simply price.
Bitcoin continues to hold relatively stable around the 200WMA, despite everything the market has thrown at it. Whether the absolute cycle low is already behind us or not, investors may increasingly be recognising that we are deep into the bear market and likely getting closer to the beginning of the next bull cycle.
What is particularly interesting is BlackRock’s IBIT.
IBIT experienced an aggressive cluster of outflows around the recent lows, exactly when BTC was testing and briefly falling below the 200WMA. Over the past couple of weeks that pattern has reversed sharply, with IBIT now attracting substantial inflows again.
Figure 5: BlackRock IBIT flows showing the shift from heavy capitulation outflows to renewed inflows.
That change is now starting to show up in the bigger picture too.
For the first time since the spot ETFs launched, cumulative flows had been trending meaningfully lower for several months. That trend has now started to turn upwards again.
Figure 6: Bitcoin ETF cumulative flows beginning to turn higher after months of decline.
One positive week does not confirm a new trend.
But after months of capitulation from traditional investors, this is exactly the kind of behaviour change we have been waiting to see.
Is this the beginning of sustained ETF demand returning? That is one of the key signals we’ll be watching over the coming weeks.
The Bitcoin Magazine Pro Team
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