Crypto ETFs see outflows of $250 million a day ahead of U.S. inflation data

Crypto markets traded cautiously on Tuesday after exchange-traded funds (ETFs) tracking digital assets recorded net outflows of around $250 million on July 13, indicating a more risk-off stance among institutional investors ahead of key U.S. inflation data.

Despite the ETF withdrawals, Bitcoin, the world's most traded cryptocurrency, was trading 0.5% higher at around $62,630, while Ethereum gained 0.4% to $1,783. The total cryptocurrency market capitalisation edged up 0.4% to $2.14 trillion, although 24-hour trading volumes fell nearly 4% to $127.4 billion, indicating subdued participation.

Analysts said markets are balancing geopolitical risks against expectations surrounding the U.S. Federal Reserve's next policy move.

Ryan Lee, Chief Analyst at Bitget Research, said the recent crypto ETF outflows reflects investors repositioning ahead of a busy macro and earnings calendar rather than a broad loss of confidence in digital assets.

“The move reflects renewed caution as higher oil prices, firm Treasury yields and uncertainty ahead of U.S. inflation data weigh on risk appetite. It is more than simple capital rotation, but it does not yet point to institutional investors abandoning Bitcoin,” he said.

He, however, added that there is no evidence of an imminent forced unwind. ETF demand and the broader macro backdrop remain more important to Bitcoin’s direction than the actions of a corporate holder.

“Bitcoin continues to find support near $63,000, with immediate resistance between $64,700 and $64,900, while Ethereum held around $1,777. A sustained move above this range could open the path toward $66,000, while a break below support would shift attention toward $61,300,” Lee said.

Avinash Shekhar, Co-founder and CEO of Pi42, said Bitcoin's ability to stay above the $62,000 mark indicates that buyers continue to defend key support levels.

"Market participants are closely tracking upcoming economic data, while improving institutional interest and steady capital inflows are helping sustain sentiment. Technical indicators also point to an important resistance zone around $68,000, with a decisive move above that level potentially setting the stage for a stronger recovery during the quarter."

Akshat Siddhant, Lead Quant Analyst at Mudrex, said renewed tensions in the Middle East have lifted oil prices and revived inflation concerns, making macroeconomic data the key catalyst for crypto markets.

"Bitcoin is consolidating around the $62,500 zone as renewed U.S.-Iran tensions and concerns over the Strait of Hormuz pushed oil prices higher and revived inflation fears. Markets are now focused on today's U.S. CPI report. A higher-than-expected inflation reading may increase the likelihood of a rate hike, while a softer print could improve risk sentiment."

He noted that on-chain data shows long-term holders accumulated 5,912 BTC over the past two days, signalling continued conviction despite near-term volatility. "Bitcoin needs to reclaim $64,000 to strengthen momentum, while $60,000 remains the key support level," Siddhant added.

The CoinSwitch Markets Desk also attributed the recent weakness to geopolitical developments but said the broader market structure remains intact.

"BTC slipped below $62K as renewed U.S.-Iran tensions weighed on broader market sentiment and revived geopolitical uncertainty. However, we view this as a temporary correction rather than a structural deterioration in market liquidity."

According to CoinSwitch, Bitcoin's close above its 200-week moving average remains an important technical signal, although the U.S. inflation report will likely determine the market's next direction.