- Cryptocurrency investment products stop a streak of outflows totaling $8 billion as Bitcoin sentiment rebounds on weaker US inflation:

Global cryptocurrency investment products have ended a record eight-week streak of net outflows worth $8 billion, as a decline in US inflation improved investor sentiment.
CoinShares’ James Butterfill said that the sustained move above $80,000 for Bitcoin requires a major shift in expectations for monetary policy.
Glassnode said the lowest ratio between Bitcoin sell and buy options over the past six months suggests traders are reducing downside hedges and rebuilding positive exposure.

James Butterfill, head of research at CoinShares, wrote in a report released on Friday that global cryptocurrency investment products are on track to register a second consecutive week of inflows after ending a run of net outflows totaling about $8 billion.

Inflation data affects consumers’ outlook for digital asset products
The company said that weaker-than-expected US inflation data revived investor sentiment and strengthened expectations for the Federal Reserve to cut interest rates.

Global digital asset funds recorded inflows of $287 million last week, and this week is expected to end with positive flows after it began with outflows. The average total net inflows to Bitcoin ETFs in the US between Tuesday and Thursday were $368 million, according to SoSoValue data.

This shift came after the release of US inflation data on Tuesday and Wednesday. Both the Consumer Price Index (CPI) and the Producer Price Index (PPI) for June came in below expectations, prompting markets to scale back expectations for further monetary tightening.

The minimum Bitcoin level may have begun to form, but potential gains are still limited.
Despite improving sentiment, CoinShares warned that a rise in the value of Bitcoin may remain capped unless there is a more substantial shift in monetary policy.

The report said: “We expect trading within a defined range, with the possibility that it may not exceed the $80,000 level, in the absence of a meaningful shift in monetary policy expectations.”

Butterfill said Bitcoin may be nearing its market low following its recent rebound, but expectations for an imminent rate cut by the Federal Reserve are still premature. He explained that market participation usually increases as Bitcoin approaches new benchmark levels, but it remains relatively weak at current price levels.

Butterfill added: “The prevailing picture is that the current environment encourages adding positions, but caution remains while sentiment is still generally negative.”

Options market indicators point to improving sentiment
In the options market, Glassnode’s data also suggests that sentiment has become more positive. The company noted that Bitcoin’s implied volatility has fallen as prices have recovered.

The slowdown indicates that much of the fear premium accumulated during the heavy selling in June has begun to fade, even though uncertainty has not disappeared entirely.

At the same time, the put-to-call ratio for Bitcoin fell to its lowest level in six months, suggesting traders are reducing loss protection as they increase exposure to potential price gains.

Glassnode wrote in an X post: “With the price stabilizing around $64,000, it seems traders are reducing downside hedges and rebuilding positive exposure—a constructive shift in sentiment.”

Bitcoin is trading at $63,900, down 0.1% over the past 24 hours at the time of writing this report.
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