Bitcoin Slides Below $118K as ETF Demand Cools and Macro Risks Rise

Bitcoin Slides Below $118K as ETF Demand Cools and Macro Risks Rise

Whales Sell at $119K, Derivatives Flash Risk, $115K Key to Hold Bullish Structure | That's TradingNEWS

TradingNEWS Archive 7/23/2025 5:13:12 PM
Crypto BTC USD

Bitcoin Drops Below $118K as ETF Inflows Pause and U.S.-EU Tariff Talks Stir Volatility

Bitcoin (BTC-USD) fell sharply to $117,634, down nearly -2% intraday, reversing from a local top of $119,900 earlier in the session. Traders unloaded risk exposure as momentum cooled and macro uncertainty resurfaced ahead of the anticipated U.S.-EU trade pact modeled on Trump’s new Japan framework.

Despite recent bullish headlines forecasting a potential move to $140K, on-chain and flow data suggest the rally has entered a critical digestion phase. Short-term holders are now underwater on recent entries above $120K, while ETF inflows have turned net neutral after six straight weeks of gains.

ETF Inflows Pause After $6.9B Run: Institutions Wait for Confirmation

The BlackRock iShares Bitcoin Trust (NASDAQ:IBIT), which led institutional allocations in June, posted just $14.8M in net inflows Tuesday—its weakest print since May 6. Cumulative inflows across all U.S. spot Bitcoin ETFs are now flat week-to-date, a signal that institutional bid interest is pausing as Bitcoin tests key resistance.

Fidelity’s FBTC also showed tapering interest, with just $7.2M in net adds after averaging $86M/day during the July run-up. Traders cited tariff-linked policy noise as a temporary deterrent, especially as the 15% reciprocal tariff model spreads from Japan to ongoing U.S.-EU talks.

Trump-EU Trade Deal Speculation Boosts USD, Cools BTC Risk Appetite

Dollar strength re-emerged as a macro headwind, with the DXY jumping to 104.88, its highest level since June 14. Investors rotated into U.S. Treasuries, pushing the 10-year yield back toward 4.21%, as leaked EU negotiation terms indicated Trump’s deal could revive capital inflows into U.S. manufacturing and real yields.

As Bitcoin increasingly trades like a macro asset, its inverse correlation to DXY (-0.67) and positive correlation to the Nasdaq (0.71) remain dominant. The stronger dollar and AI-led equity pullback weakened crypto risk-taking.

Derivatives: Open Interest Slides, Skew Turns Defensive

Open interest across CME, Binance, and OKX fell by $2.3B, the sharpest decline since June 17. Funding rates on perpetuals turned slightly negative on Binance (-0.0024%), while options traders rotated into $115K and $112K puts, lifting the 1-week put/call ratio to 0.79.

Implied volatility (IV) rose slightly to 53.4%, with the 25-delta skew now favoring downside protection at +4.9%, indicating hedging demand among leveraged long books.

Whale Selling Accelerates Above $119K; Dormant Coins Wake Up

Wallets holding 10,000+ BTC net reduced exposure by 9,400 BTC in the past 48 hours, according to CryptoQuant. Dormant coins—those unmoved for over 12 months—recorded the highest weekly transfer volume since April, suggesting early-cycle holders are exiting into strength.

Glassnode’s Spent Output Profit Ratio (SOPR) for long-term holders ticked above 1.05, historically a signal of topping behavior. While this does not confirm a macro reversal, it reinforces the idea that $120K+ zones are being treated as distribution levels—not accumulation.

On-Chain Activity Moderates: Fees Slide, NVT Ratio Rises

Daily transaction fees fell 16.2% week-over-week, driven by a drop in Ordinals activity and lower high-fee block congestion. Miner revenue composition dropped back to 4.8% from fees, down from June’s 6.3% peak, cutting into hash profitability.

Meanwhile, the Network Value to Transactions (NVT) ratio jumped to 73.6, signaling that network valuation may be outpacing economic throughput—a classic warning for overbought conditions.

Technical Setup: Bulls Must Defend $115,000 to Avoid Breakdown

  • Immediate resistance: $120,600 (rejection zone)

  • Support 1: $115,000 (volume shelf + 21EMA)

  • Support 2: $111,800 (swing low, July 17)

  • Major pivot: $108,400 (June breakout level)

  • RSI (1D): 57.3 – neutral zone

  • MACD: Bearish crossover developing

  • Volume: 12% below 30-day average

A clean daily close below $115K would open the door to a fast retest of $111.8K, with heavy liquidation pressure expected below that level. Bulls need to recapture $120,600 with volume to revalidate the breakout toward $125K–$130K.

Bitcoin ETF Demand Could Reignite, But Caution Prevails

While there’s no structural breakdown yet, ETF flows, on-chain trends, and macro pressure now require confirmation before higher targets become actionable. Traders appear to be positioning for a rangebound August, as uncertainty around Trump’s fiscal impact and eurozone retaliation clouds cross-asset sentiment.

ETF desks at Valkyrie and Galaxy report “bid liquidity reactivating under $115K”, particularly from long-only allocators who missed the early July entry.


Verdict: Bitcoin (BTC-USD) – Hold, Watch $115K Closely

Bitcoin remains in a mid-cycle consolidation, with macro headwinds capping upside and whale exits pressuring the near term. ETF flows are not reversing, but momentum has paused. A break below $115K could trigger broader deleveraging. Long-term bull case intact, but short-term caution warranted.

Rating: Hold
Break below $115K → Sell trigger
Break above $120.6K → Upgrade to Buy

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