Bitcoin Rebounds from One-Year Low as ETF Inflows Fuel Interim Bottom Hopes

Bitcoin Recovery from One-Year Low Suggests Interim Bottom May Be Forming as ETF Inflows Return

Bitcoin has staged a tentative recovery after plunging to its lowest level since October 2024 on 5 June, raising hopes that the world's largest cryptocurrency may be in the process of forming at least an interim bottom.

After falling to an over one-year low of $59,110.90 amid heavy institutional selling and deteriorating macroeconomic sentiment, Bitcoin has rebounded back above the $65,000 mark as bargain hunters and long-term investors returned to the market.

Although the recovery remains modest relative to the scale of the recent decline, the stabilisation in price coincides with the first signs of renewed ETF demand following several weeks of persistent institutional outflows, suggesting selling pressure may be beginning to ease.

Recovery from the 5 June low raises hopes of a bottom

Bitcoin's rebound from its 5 June low has improved market sentiment after the cryptocurrency briefly traded at its weakest level in more than a year.

The recovery has seen Bitcoin successfully defend the psychologically important $60,000 support zone, which also acted as a floor during February's correction.

From a technical perspective, repeated buying interest around the same support region suggests the market could be attempting to establish at least an interim bottom.

While confirmation would require a break above key resistance levels, the failure of bears to push prices materially below the June low despite exceptionally negative sentiment may indicate that much of the forced liquidation has already occurred.

Many analysts nevertheless caution that volatility is likely to remain elevated until macroeconomic conditions improve and institutional demand strengthens further.

ETF outflows recently dominated but inflows have begun to return

Institutional flows remain the principal driver of Bitcoin's price action.

The week ending 5 June saw US spot Bitcoin ETFs record approximately $1.72 billion of net outflows, marking one of the largest weekly withdrawals since the products were launched and extending a four-week run of heavy redemptions. More than $4 billion left spot Bitcoin ETFs during the prolonged selling streak, with BlackRock's IBIT accounting for a substantial proportion of the withdrawals.

However, sentiment has improved since the market reached its low.

The 13-session outflow streak ended with a modest net inflow into spot Bitcoin ETFs, signalling that institutional investors may once again be selectively adding exposure after the sharp correction.

More recently, US spot Bitcoin ETFs recorded around $85.8 million of daily net inflows, led by BlackRock and Fidelity, ending another short-lived run of withdrawals and suggesting institutional demand is beginning to stabilise.

Although cumulative flows remain negative over recent weeks, the return of inflows has encouraged investors who believe the correction may be entering its later stages.

Long-term institutional adoption remains supportive

Despite recent volatility, Bitcoin's structural investment case remains largely intact.

Large asset managers, pension funds and wealth managers continue to hold significant allocations through regulated ETF products, while institutional infrastructure continues to expand through custody services, derivatives markets and corporate treasury adoption.

Many analysts view the recent ETF outflows as tactical portfolio repositioning driven by higher bond yields and macroeconomic uncertainty rather than a fundamental reassessment of Bitcoin's long-term role within diversified portfolios.

As a result, cumulative net inflows since the launch of spot ETFs remain overwhelmingly positive despite the recent correction, reinforcing the long-term institutional adoption narrative.

Macroeconomic backdrop remains challenging

Bitcoin continues to trade primarily as a macro-sensitive risk asset.

Persistent inflation pressures, elevated Treasury yields and uncertainty surrounding future Federal Reserve policy have reduced investor appetite for speculative investments.

Geopolitical tensions and concerns over slowing global growth have also encouraged defensive positioning across financial markets, contributing to recent weakness in cryptocurrencies.

While equity markets have shown signs of stabilisation, helped by continued interest in artificial intelligence-related companies, digital assets remain heavily dependent on improvements in liquidity conditions and institutional risk appetite.

This may improve once an agreement has been signed between the US and Iran and the Straits of Hormuz re-open to global trade.

Bitcoin bullish case:

While Bitcoin remains above its early June low at $59,110.90, the recent gradual recovery may continue.

For this to be the case, the May-to-June downtrend line around $66,979.00 needs to be bettered on a daily chart closing basis.

If so, the 7 April low at $67,718.73 and the 1 April high at $69,237.75 may be reached, followed by the minor psychological $70,000 region.

Support may be spotted around the 7 June $64,387.53 high and at the 9 June $60,748.85 low ahead of the early June trough at $59,110.90.

Bitcoin bearish case:

Were the current June low at $59,110.90 to be slipped through on a daily chart closing basis, the September 2024 high and October 2024 trough at $66,524.45-to-$65,153.38 may be reached next. Failure there may lead to the October 2024 low at $58,890.48 being revisited as well.

Short-term outlook: bullish while above the 5 June low at $59,110.90, targeting the $70,000.00 region

Medium-term outlook: bearish with a short-term bullish bias while below the 2 June high at $71,336.70

Bitcoin daily candlestick chart