Bitcoin moved back above $61,000 on Thursday, recovering from a 21-month low reached earlier in the week, but the rebound did little to erase concerns about heavy outflows from U.S. spot Bitcoin ETFs, defensive options positioning and renewed pressure across the digital asset market.
The largest cryptocurrency traded near $61,516 in early Thursday activity after falling to about $57,800 on July 1, according to market data. The move marked a roughly 6% recovery from the week’s low, though Bitcoin remained under pressure after a weak June in which spot Bitcoin ETFs recorded $4.5 billion in total net outflows, their worst month since the products launched in early 2024.
The latest ETF data showed U.S. spot Bitcoin funds posted a $296 million net outflow on July 1. The selling extended a difficult stretch for the category, even as the Grayscale Bitcoin Mini Trust ETF recorded the strongest single-day inflow among the group at $36.3 million.
Ether also stabilized, trading near $1,662 on Thursday morning. Spot Ether ETFs posted a combined $14.8 million net inflow, helped by a $36.6 million inflow into one fund on Monday. Still, the rebound was modest compared with the scale of recent withdrawals, and analysts said the asset has yet to confirm a durable trend reversal.
The broader picture remains mixed. ETF flows show large-scale risk reduction, options markets point to demand for downside protection, and macroeconomic policy remains restrictive. At the same time, on-chain data suggests long-term Bitcoin holders have resumed accumulation, exchange reserves continue to decline, and stablecoin activity indicates that capital remains inside the digital asset ecosystem rather than leaving altogether.
ETF flows remain the main pressure point
The sharp outflows from spot Bitcoin ETFs have become one of the clearest signs of stress in the market. In June, the funds lost $4.5 billion, with $3.55 billion in redemptions coming from one large fund alone. Through June 26, spot Bitcoin ETFs posted $1.79 billion in net redemptions, their second-worst week on record.
That selling coincided with Bitcoin’s slide toward cycle lows. Bitcoin touched $58,000 on June 25, then fell to about $57,800 at the start of the third quarter, according to Bitfinex research. The June 26 quarterly options expiry, which carried $10.6 billion in notional value across Bitcoin and Ether positions, failed to provide meaningful relief.
ETF outflows have been especially important because spot Bitcoin funds were a major source of demand after their early-2024 debut. Their weakness in June suggests that newer capital, particularly capital tied to regulated market vehicles, has become more sensitive to price declines, volatility and policy uncertainty.
That stands in contrast with parts of the on-chain market. Glassnode analyst Beamish wrote that long-term holders have resumed accumulation after a prior distribution phase. This split between ETF redemptions and long-term holder behavior suggests that the recent selloff is not being driven evenly across all market segments.
The divergence matters because ETF selling can create mechanical pressure on spot markets, while long-term holder accumulation can help build a deeper base of support. For now, the first force has dominated short-term price action, but the second may be limiting the depth of the decline.
Long-term holders show signs of accumulation
On-chain indicators show that a growing portion of Bitcoin supply is under pressure, but not all of it is being sold. Beamish said about 10.83 million BTC are currently held at a loss, compared with 9.22 million BTC held in profit. That imbalance reflects the damage caused by the recent decline, especially for buyers who entered during higher price ranges.
A separate measure also points to stress among seasoned holders. The Long-Term Holder Spent Output Profit Ratio recently fell to 0.615, its lowest level since July 2023. A reading below 1 indicates that long-term holders who moved coins were doing so at a loss.
Historically, this kind of realized loss among long-term holders has often appeared near periods of capitulation. It does not guarantee an immediate bottom, but it can show that weaker hands within the long-term holder group have already exited or are in the process of exiting. Markets often become more durable when forced selling is absorbed and remaining holders become less willing to sell at lower levels.
Beamish also noted that order-book demand has built around current prices, suggesting stronger spot market support. This is important because a market bottom typically requires more than a pause in selling. It also requires buyers willing to step in aggressively near key levels.
Hashdex executive Kerbage pointed to similar underlying support. He said exchange Bitcoin reserves have dropped to a seven-year low of 2.21 million BTC, while long-term holder supply has reached a record 16.3 million BTC with limited distribution activity. Lower exchange reserves can reduce the amount of Bitcoin immediately available for sale, though they do not eliminate volatility when ETF redemptions or derivatives liquidations accelerate.
Options traders remain defensive
Even as spot prices recovered, options markets continued to show caution. Traders have been paying more for downside protection, with put-call ratios reaching a 12-month high. The 25-delta skew stood at 5.2% in favor of puts, showing that demand for bearish protection remained elevated.
Implied volatility has also climbed. Beamish said the increase may mark the beginning of a bottoming phase, though he warned that another spike in volatility remains possible. In digital asset markets, rising implied volatility can reflect two different conditions at once: fear of additional downside and growing expectations that a sharp move is near.
Bitcoin remains below a key “gamma flip” level near $68,000, according to market commentary. When price trades below that level, dealer positioning can amplify volatility rather than dampen it. A recovery above that region would likely improve the technical structure, but Bitcoin remains several thousand dollars below it.
The defensive tone in options is consistent with ETF outflows and weaker spot momentum. Traders are not positioning as if the market has fully cleared the risk of another leg lower. Instead, the options market suggests that many are treating the rebound from $57,800 as a relief move until stronger confirmation emerges.
That confirmation could come from sustained ETF inflows, a break above major resistance, reduced downside skew or evidence that mechanical selling has faded. Without those signals, rallies may continue to face selling from traders looking to reduce exposure or hedge.
Bitfinex points to crypto-native selling
Bitfinex said recent Bitcoin weakness appears to be driven more by crypto-native selling pressure than by a major macroeconomic shift. That view is supported by the behavior of traditional markets. Treasury yields declined, the S&P 500 ended the quarter at 7,449, up 9.6% for 2026, and oil prices fell back toward pre-conflict levels after extended ceasefire discussions between the U.S. and Iran.
If macro conditions were the primary cause of the Bitcoin decline, broader risk assets would likely have shown more comparable weakness. Instead, Bitcoin retested cycle lows while U.S. equities moved higher. That disconnect suggests that forced selling, ETF redemptions, balance-sheet management and derivatives positioning inside crypto markets carried more weight.
Bitfinex calculated Bitcoin’s aggregate realized price at about $53,000, roughly 9% below current market levels. The realized price is watched closely because it represents the average cost basis of coins based on their last movement. In prior cycles, moves toward realized price have often coincided with capitulation phases.
The firm said market resilience now depends on reduced mechanical selling. In practical terms, that means the market needs ETF redemptions to slow, leveraged positions to stabilize and large holders to avoid additional forced liquidations.
The pressure has not been limited to ETF products. Strategy authorized up to $1.25 billion in Bitcoin sales on June 29 to increase dollar reserves and service dividend obligations that rose to 12%. Its shares now trade 30% below the value of its underlying Bitcoin holdings, the largest discount since 2020. That discount reflects concern about financing costs, balance-sheet flexibility and the possibility of further asset sales.
Ether rebounds, but resistance remains nearby
Ether’s recovery has been less convincing than Bitcoin’s. XS.com analyst Massabni said Ether rebounded from $1,500 to around $1,620, but described the move as a technical recovery rather than a full reversal.
Ether traded near $1,662 on Thursday morning in muted action. Analysts said holding above $1,500 remains important. A sustained defense of that level could open the way toward $1,800, while a breakdown below it could extend losses.
The short-term technical picture is also focused on the $1,665 area, near a key moving average. A clean move above that level would offer an early sign that the recovery is becoming more sustainable. The $1,700 to $1,800 region remains a major resistance zone, where traders may look to sell into strength unless ETF demand improves.
Spot Ether ETFs showed some relief with a combined $14.8 million net inflow, led by a $36.6 million inflow into one fund on Monday. But the broader trend remains weak. Spot Ether ETFs have recorded seven straight weeks of cumulative outflows totaling $1.18 billion.
The return of small inflows after a nine-day withdrawal streak is encouraging, but the scale is not yet large enough to signal a meaningful shift in sentiment. Ether needs stronger spot demand, improved ETF flows and a break above nearby resistance before traders are likely to treat the rebound as more than a short-term correction.
Fed policy keeps risk appetite constrained
The macro backdrop remains complicated. Reports showed easing price pressures and a weaker-than-expected 57,000 job gain in June, while the unemployment rate edged up to 4.2%. Those figures could normally strengthen the case for a softer Federal Reserve stance, especially if inflation continues to moderate.
However, Federal Reserve Chair Warsh signaled that policy will remain firm until inflation is clearly moving back to the 2% target. At the European Central Bank forum, Warsh said the Fed remains committed to restoring price stability, reinforcing expectations that rate cuts may be delayed until at least 2027.
The Fed has now held rates steady for a fourth straight meeting under Warsh. Market data showed traders reduced the implied probability of a rate hike this month to 28%, down from 33% earlier in the week. That shift suggests traders see less risk of additional tightening, though not enough to price in near-term easing.
For Bitcoin and Ether, this matters because restrictive policy keeps cash yields attractive and can reduce demand for volatile assets. Even when inflation data improves, digital assets may struggle if central bank messaging remains hawkish.
Currency markets also reflected the policy backdrop. The USD/JPY pair retreated from 162 on profit-taking, but the broader trend still favored dollar strength. A strong dollar can weigh on risk assets because it tightens financial conditions globally and makes dollar-denominated assets more expensive for overseas buyers.
Stablecoins and blockchain activity show deeper demand
Despite the pressure in spot ETFs and derivatives, blockchain activity continues to expand. Kerbage said blockchain transaction volume reached a record in the second quarter, while the value of tokenized real-world assets grew 60% this year.
Stablecoin settlement volume in the first half of 2026 has already exceeded the total for the previous full year. That suggests digital asset infrastructure is still seeing strong usage, even as major tokens trade under pressure.
The steady minting and circulation of stablecoins also suggests that capital is not fully exiting crypto markets. Instead, some traders appear to be moving into cash-equivalent positions while waiting for better entry points. Stablecoins often serve as dry powder during periods of volatility, especially when traders are unwilling to hold Bitcoin or Ether but still want to remain close to the market.
This distinction is important. A market where capital leaves entirely is more vulnerable to prolonged weakness. A market where capital rotates into stablecoins can recover more quickly if sentiment improves, because liquidity remains within the ecosystem.
Tokenized real-world assets add another layer of support for blockchain adoption. Growth in that segment shows that digital asset networks are being used for more than speculative trading. While that does not immediately protect Bitcoin or Ether prices, it strengthens the long-term case for blockchain-based settlement infrastructure.
Market split defines the next phase
The current market is defined by a sharp split. ETFs are flashing warning signs, options traders are hedging aggressively, and some long-term holders have realized losses. At the same time, other long-term holders are accumulating, exchange reserves are low, stablecoin activity is strong, and on-chain infrastructure continues to grow.
That combination creates a market that may be closer to a bottoming process than a clean bullish reversal. Selling at a loss by long-term holders, elevated put demand and rising implied volatility are often seen late in a downturn, but they can also appear before one final volatility spike.
For Bitcoin, the key near-term levels are the recent low near $57,800, the recovered $61,000 area and the larger resistance zone closer to $68,000. A sustained move above $68,000 would likely improve market structure and reduce volatility pressure tied to dealer positioning. A move back below $57,800 would raise the risk of a deeper test toward realized-price levels near $53,000.
For Ether, the $1,500 support level remains central. Holding that area could allow a push toward $1,700 and $1,800, but failure there would likely invite renewed selling. The $1,665 moving-average region is the first technical barrier Ether needs to reclaim to show that momentum is improving.
The next decisive signal may come from ETF flows. If Bitcoin ETF redemptions slow and Ether funds build on their small inflows, traders may become more willing to treat the latest rebound as the start of stabilization. If outflows persist, rallies may continue to be sold.
For now, Bitcoin’s move back above $61,000 shows that demand has not disappeared. But the market remains fragile, with traders balancing evidence of long-term accumulation against the immediate pressure of ETF redemptions, defensive options positioning and a Federal Reserve that is not yet ready to ease policy.
Worried about ETF outflows and volatility? Learn how to react in choppy markets in this guide.
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