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Bitcoin flat near $63,500, but the flows have quietly turned
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- DeepHorus
Bitcoin hovered near $63,500, appearing stuck in summer doldrums, but the flow picture beneath the surface has quietly turned bullish, according to Yusuf Fakhro, partner at ARP Digital. In a note to CoinDesk, Fakhro highlighted that institutional behavior has reversed from selling to buying. The shift marks a notable change from the second quarter's persistent outflows.
US spot bitcoin exchange-traded funds took in more than 14,000 BTC over five days into August 7, marking the strongest stretch of inflows since May. The third quarter has so far seen roughly 11,000 BTC of net inflows, a sharp contrast to the 110,000 BTC of outflows recorded in the back half of the second quarter. That shift suggests the institutional selling that defined Q2 has ended.
Market depth has deteriorated even as demand returns. Spot volumes have fallen to two-and-a-half-year lows, while perpetual futures volumes have dropped to three-year lows, Fakhro noted. Volatility is also sitting near multi-year troughs, creating an unusually thin trading environment. This combination of fresh demand and low liquidity sets up a fragile market.
Fakhro argued that fresh demand arriving into the thinnest tape in years, when nobody is watching, is how durable bottoms tend to form. He pointed to bitcoin's six-month range between $60,000 and $80,000, with the price holding near a 50% drawdown from highs, rather than grinding lower as in the 2014, 2018, and 2022 bear markets. This behavior suggests apathy rather than deterioration, he said. On-chain data is starting to show bottoming characteristics as sentiment shifts from panic to caution.
However, Fakhro also cautioned that risks remain on both sides. Bitcoin is as stuck below $64,000 as it is above $62,000, forming a box rather than a launchpad. Perpetual open interest has held above 300,000 BTC through the summer, elevated against its historical average while volumes have collapsed. That leverage leaves the market exposed to a sharp liquidation move in either direction, Fakhro warned.
The coming weeks will determine whether the quiet accumulation can break the range or if a violent squeeze is in store. For now, the reversal in flows offers a contrarian signal that institutional money is quietly positioning for a rebound. But the thin tape and high leverage mean any move could be amplified.
