Bitcoin ETF inflows extend to second week, but recovery lacks momentum

US-listed spot Bitcoin exchange-traded funds (ETFs) have experienced renewed investor interest, with net inflows totaling $75.7 million for the week ending July 17. This marks the second consecutive week of positive inflows following a larger inflow of $197.4 million the previous week, bringing total ETF inflows for July to $200.2 million. Despite this recent uptick, inflows remain insufficient to counteract the significant outflows seen in June, which totaled $4.5 billion, leaving the total net flows for 2023 still negative at $5.2 billion, according to SoSoValue data.

Analysts cited by Cointelegraph suggest that while the return of inflows indicates a reduction in selling pressure, the current buying momentum is not strong enough to confirm a sustained uptrend in Bitcoin prices. Simon-Peter Massabni, head of business development at XS.com, noted that Bitcoin’s recovery toward $64,000, after a drop in June, lacks enough strength to firmly establish a new upward trend. He emphasized that Bitcoin needs to break decisively above the $65,000 to $65,500 range to signal a clear trend reversal, and cautioned that current inflows may reflect easing selling rather than a full institutional return.

Further dampening enthusiasm, Citigroup recently revised its 12-month Bitcoin ETF inflow forecast from $10 billion down to zero amid weaker-than-expected inflows and ongoing outflows. Citi also lowered its Bitcoin price target for the next year from $112,000 to $82,000, reflecting concerns about the demand strength. Massabni remarked that while there are reasons to begin buying Bitcoin, the market currently lacks a strong catalyst—specifically, a large, persistent flow of capital—to transform the current rebound into a lasting uptrend.

Comparisons were also drawn to gold ETFs, as Bloomberg analyst Eric Balchunas suggested Bitcoin ETFs could follow a similar trajectory of rapid early gains followed by prolonged periods of weaker performance and cyclical recoveries. Balchunas noted on social media that Bitcoin ETFs may experience cycles of “spectacular gains, painful drawdowns and recoveries,” potentially setting higher highs over time but with uneven progress. Overall, while the recent ETF inflows offer some positive signals, the broader picture remains cautious according to the sources cited.