What signals does the recovery of Bitcoin ETFs send?

Author: Bitcoin Magazine Pro Team; Compiled by Shaw, Jinse Finance

Latest Market Movement

Bitcoin posted an overall weekly gain. After several weeks of weakening market conditions, this rebound has finally arrived, albeit rather late. Bitcoin’s increase over the past seven days was 4.73%. The price has rebounded from recent lows and is now attempting to build upward momentum by drawing support from the 200-week moving average.

Figure 1: BTC price movement over the past week.

Last week, Bitcoin Magazine Pro founder Philip Swift posted on the X platform to explain why the chart below is the core reference chart for Bitcoin investors entering the third quarter. He described the chart as a Bitcoin market panorama because it clearly shows the relationship between Bitcoin’s key support and resistance levels and investors’ potential trading behavior.

Figure 2: Bitcoin market panorama for the third quarter.

The latest market chart indicates that Bitcoin is currently in what Philip Swift calls the golden zone for dollar-cost averaging, with the price hugging the 200-week moving average. From historical price action, this area is one of the most important support levels during Bitcoin bear-market phases and is often a high-quality zone for long-term capital to accumulate coins in batches.

Below the current price, the next key observation point is the realized price, currently around $53,200. If Bitcoin’s price falls into this range, it will open a deep-value positioning window. At that time, market prices will be close to the average cost basis of Bitcoin holders across the entire network. However, whether the market can offer investors this low-price opportunity remains uncertain.

The key resistance level above is still the 200-day moving average. If the price can hold firmly above that average, it will likely signal a recovery in market confidence. But then the price would be far higher than the current level, and the deep low-price window for long-term positioning may no longer exist.

Bitcoin ETF Shows Signs of Recovery

In recent weeks, spot Bitcoin ETFs have continued to face sustained pressure. In the U.S., related funds have recorded net outflows for eight consecutive weeks, creating the longest continuous outflow cycle since the products were launched—an outcome that directly and intuitively reflects extremely weak institutional demand in the current phase of the cycle.

However, on Thursday, the market saw a clear turnaround. The ETF market recorded net inflows of $221.7 million. This is the largest single-day net inflow since early May. At the same time, it ended a streak of 10 consecutive trading days of net outflows—during which funds cumulatively lost more than $2.7 billion.

Figure 3: Bitcoin ETF daily flow data shows a large inflow on Thursday.

By far the vast majority of these net inflows came from Fidelity’s FBTC product. The fund attracted approximately $166 million in inflows that day. Even though BlackRock’s IBIT is still facing redemptions, Fidelity is still the main driver behind this round of capital returning.

Figure 4: Fidelity FBTC inflow surge.

The key question now is: Is this capital return the start of a new round of sustained inflows, or is it just a one-day rebound after several weeks of large-scale outflows? The scale of prior outflows was not trivial. Based on the cumulative capital flow chart, since spot Bitcoin ETFs went live, this is the first time that overall market demand has shown a clear and significant decline.

Figure 5: ETF cumulative flows show a recent downward trend.

For Bitcoin bulls, the coming weeks require close tracking of this key trend. If ETF capital can continue to return, it will provide fresh support for coin prices; otherwise, it indicates that even if a rebound appears in the near term, institutional funds’ willingness to enter remains cautious.