Following the July 4 holiday break, U.S. traders were met with a significant drop in bitcoin (BTC) price, witnessing a more than 10% decline from the pre-holiday levels. This sudden plunge stirred concerns among investors and analysts alike.
Based on data from Exchange-Traded Funds (ETFs), market participants decided to take advantage of the decreased prices, resulting in a notable increase in trading activity.
According to the latest figures compiled by Farside Investors, U.S.-based spot bitcoin ETFs experienced a substantial inflow of $143.1 million on Friday, marking the highest level of net inflows in at least two weeks.
Among the notable performers in terms of net inflows was Fidelity’s Wise Origin Bitcoin Fund (FBTC), which attracted $117.4 million in new investments. Other ETFs that saw positive net inflows included the Bitwise Bitcoin ETF (BITB), the ARK/21 Shares Bitcoin ETF (ARKB), and the VanEck Bitcoin Trust (HODL). Conversely, the Grayscale Bitcoin Trust (GBTC) continued to witness outflows.
Despite the recent market volatility, bitcoin has shown resilience by staging a modest recovery after the sharp decline observed earlier. The price of bitcoin, which dropped from nearly $61,000 to under $54,000, has now climbed back to around $56,800. However, this still represents a 6% decrease from the previous week and a significant 23% drop from its all-time high above $73,500 recorded in mid-March.
The recent downtrend in bitcoin’s price has been attributed to concerns surrounding an increase in supply. Notably, trustees overseeing the distribution of assets from the now-defunct exchange Mt. Gox have initiated the process of returning 140,000 bitcoins to former customers. Additionally, reports suggest that the German government is considering selling a portion of the thousands of bitcoins it currently holds, adding to the selling pressure on the market.
As the market continues to navigate through these developments, investors are closely monitoring the evolving dynamics in the cryptocurrency space to gauge the potential impact on bitcoin’s price and overall market sentiment.