Has bitcoin received a signal for a rebound? Spot ETF ends eight weeks of "bleeding": net fund inflows for two consecutive weeks, but geopolitical risks and regulatory uncertainties continue to suppress the rebound.

After experiencing a record two-month capital outflow, the US spot Bitcoin ETF finally saw a continuation of funds inflow. In the past two weeks, 13 spot Bitcoin ETFs recorded a total of approximately $273 million in net inflows, ending the previous eight consecutive weeks of over $8 billion in capital outflow. This reversal occurred under extreme pressure, with a single-day outflow reaching as high as $425 million on Monday, amidst escalating US-Iran military conflict, and is seen as a key signal that the cryptocurrency market may be bottoming out. However, the inflow amount is still insignificant compared to the previous outflow. Amidst multiple pressures such as political inflation concerns triggered by GEO Group Inc, the Federal Reserve's fluctuating interest rate expectations, and the deadlock of key cryptocurrency legislation in the United States, the price of Bitcoin continues to struggle within the range of $60,000 to $65,000. Capital reversal: from $1.79 billion single-week outflow to consecutive two weeks of net inflow The intensity of this capital flow reversal contrasts sharply with the previous outflow. During the eight-week capital outflow period, investors withdrew over $8 billion from Bitcoin ETFs. One week ending on June 26 recorded a net outflow of $1.79 billion, the second highest in history. The total net inflow for ETFs plunged from $59.34 billion to $51.08 billion. The reversal began in mid-July. In the past two weeks, Bitcoin ETFs recorded a total of approximately $273 million in net inflows. Looking at daily data, inflows were $181 million on Tuesday, $107.8 million on Wednesday, $79.15 million on Thursday, and $132.3 million on Friday - maintaining a net inflow trend for four consecutive trading days. Of particular note is the breadth of the fund distribution. Data from Santiment shows that the rebound in demand was not concentrated in a single product, but rather spread across multiple issuers. Fidelity's FBTC contributed the most during the early stages of the rebound, attracting approximately $166 million; ARKB recorded a net inflow of approximately $91.8 million; followed by BlackRock, Inc. IBIT with a daily inflow of $138.9 million. The simultaneous improvement of multiple funds weakened the narrative of "purely technical inflows", better reflecting the wider participation of institutions. Meanwhile, the performance of the spot Ethereum ETF is more eye-catching. It saw a net inflow of $105.4 million last week, continuing the momentum from the previous week with $84.42 million. The Ethereum ETF also experienced eight consecutive weeks of fund outflows, with cumulative losses exceeding $1.1 billion. Richard Galvin, Chairman of cryptocurrency investment company DACM, said: "Given the size and coverage of ETFs, they have become a good indicator of the sentiment of Bitcoin and the industry as a whole. After eight weeks of decline, confirmation within two weeks is a positive signal." Technical rebound: Bitcoin returns to the 200-week moving average, but remains halved from its all-time high The price of Bitcoin has returned above the 200-week moving average, which is around $63,300, considered a key boundary between a long-term bear market or bull market. For weeks, influenced by macroeconomic uncertainty, the price of Bitcoin has been hovering in the range of $60,000 to $65,000. Even after the US launched a new round of airstrikes against Iran, Bitcoin showed resilience in the Asian markets, briefly surpassing $65,000 on the morning of July 20. As of the Asian trading session, the current price of Bitcoin is around $64,725. However, when looking at a longer time frame, the price of Bitcoin has fallen by about 50% from its all-time high of $126,000 in October 2025. From 2026 to the present, Bitcoin has accumulated a decline of 26%. From a technical perspective, the 4-hour period shows a wide-ranging upward trend, but a one-sided trend has not yet formed. The key resistance level is at $65,600, and if there is no significant breakthrough, there is still a risk of a pullback in the market. GEO Group Inc and macro double suppression: US-Iran conflict ignites inflation concerns, Fed interest rate expectations fluctuate The reason why this capital reversal is noteworthy is because it occurred in the midst of political and macroeconomic headwinds from GEO Group Inc. On July 7, the US Central Command announced that it had completed a new round of large-scale military strikes against Iran, hitting over 80 targets, including Iranian air defense systems, command and control networks, and more than 60 Iranian Islamic Revolutionary Guard Corps small fast boats. Since then, the US military has continued to attack Iranian targets, with strikes continuing for eight consecutive nights as of July 20. As tensions between the US and Iran escalate, Brent crude oil has returned to over $90 per barrel. The tensions in the Strait of Hormuz have directly pushed up oil prices, sparking inflation concerns. Historically, an escalation in the region has typically led investors to reduce exposure to risky assets and turn to traditional safe-haven assets such as oil and gold. Damien Loh, Chief Investment Officer of Ericsenz Capital, said: "The importance of the US-Iran conflict lies in its impact on interest rates, which in turn affects all risky assets." The Federal Reserve has maintained interest rates between 3.5% and 3.75% since the beginning of 2026. Despite June's CPI data falling below expectations - with overall inflation down 0.4% month-on-month, the largest monthly decline since April 2020 - the probability of a rate hike in July temporarily dropped to 15.5%. However, the inflation risks brought about by the GEO Group Inc conflict quickly caused the rate hike expectations to rebound, with CME FedWatch data showing that the probability of a rate hike in July surged to 46.5%. As of July 20, this probability has fallen back to around 14%. "The prospect of a rate hike by the Fed may hinder the full return of institutional capital," Loh added. Regulatory variables: "CLARITY Act" legislation stuck in the Senate, with a passing probability of only 38% Another key catalyst awaited by the market - the US cryptocurrency market structure legislation, the "CLARITY Act" - is currently stuck in the Senate. The bill was passed by the House of Representatives in July 2025 with 294 votes in favor and 134 votes against, and was approved by the Senate Banking Committee on May 14, 2026, by a bipartisan vote of 15-9. However, with only about 20 working days left before the Senate recess around August 7, the bill has yet to be put to a full Senate vote. According to Polymarket data, the probability of the bill passing in 2026 is only 38%. The Republicans hold 53 seats, but at least two Republican senators are expected to vote against it, and the leadership would need at least 7 Democrats to defect to reach the 60-vote threshold to end debate. There are still four unresolved disputes: ethical provisions regarding officials' cryptocurrency holdings, objections from law enforcement agencies to the non-custodial developer protection clause in Section 604, resistance from the banking industry to stablecoin profits, and the issue of vacant CFTC commissioner seats. Loh pointed out that if the bill can be passed before the August recess, it may be a catalyst for the price of Bitcoin to rise. However, as the time window narrows, this hope is becoming increasingly faint. It is worth noting that Bitcoin itself has been classified as a commodity by both the SEC and CFTC, without relying on the "CLARITY Act" for regulatory clarity. This makes Bitcoin a major safe-haven asset in the cryptocurrency field, amidst regulatory uncertainty faced by alternative coins such as XRP and Solana. The paradox of the largest holding company: Strategy's first large-scale sell-off triggers a narrative shake-up As ETF funds flow back in, another key variable is brewing - Strategy, the world's largest enterprise Bitcoin holder (MSTR.US), is wavering on its long-standing commitment to "never sell coins." Since mid-June, Strategy has disclosed its first sale of a small amount of Bitcoin held since 2022, leading to a 10% decline in the price of Bitcoin. On July 6, Strategy disclosed the sale of 3,588 Bitcoin, cashing in approximately $216 million, to pay preferred stock dividends and bolster cash reserves. This is the first significant active reduction in holdings since the company began hoarding Bitcoin on a large scale in 2020. As of July 5, the company's Bitcoin reserves had dropped to 843,775 coins. This move has multiple far-reaching implications. Firstly, the company holds about $2.55 billion in cash and chose to sell Bitcoin instead of issuing common stock financing in a situation of abundant funds, a stark departure from its previous path. Secondly, the core investment narrative of "per share Bitcoin holdings" with continued growth has been broken. Thirdly, the market is highly alert to the potential systemic selling crisis that may arise after the company's cash flow is exhausted - the company faces $1.8 billion in annual dividend and interest obligations, and the quota for the approval of a reduction in holdings of 20,000 Bitcoin by shareholders is highly likely to be fully executed. Strategy's core valuation metric, mNAV, has fallen below 1, indicating that the market value has fallen below the value of its Bitcoin holdings. The company's stock price has fallen by about 75% over a year. Founder Michael Saylor had positioned the company as a "never sell" Bitcoin accumulator, but has now clearly stated a willingness to sell Bitcoin when necessary. Bottoming out or trap? The two weeks of consecutive net inflows in ETFs, Bitcoin returning above the 200-week moving average, and the resilience shown in the Asian markets amidst the US-Iran conflict - these signals together form a cautiously optimistic bottoming narrative. However, concerns should not be overlooked. The $273 million inflow over two weeks is significantly smaller compared to the over $8 billion outflow in the previous eight weeks. Analysts point out that the cumulative net inflow of Bitcoin ETFs in 2026 is still negative, at around $5.4 billion. The cryptocurrency analysis company BRN stated in a report: "First, observe the ETF fund flows. Several weeks of positive trends will indicate that institutional funds are re-entering the market in a structured manner." At the macro level, the market is closely watching whether the US Congress can pass the long-awaited "Market Structure Act" (Clarity Act) before its August recess. If the bill is passed, it could be a catalyst for the price of Bitcoin to rise. Until then, whether Bitcoin can maintain its current support level amidst the escalating US-Iran conflict and the uncertainty of Federal Reserve policy will determine whether this "bottoming rebound" is a trend reversal or just another temporary noise. Bitcoin is standing at a critical crossroads. Whether the resistance level of $65,600 can be effectively broken through will determine if this rebound is a trend reversal or a "dead cat bounce." The Federal Reserve interest rate decision on July 29, the legislative window before the Congress recess on August 7, and Strategy's next steps in holding operations will be the core variables to watch in the coming weeks.