This week's decline in bitcoin from $65,000 was not due to aggressive selling but rather a significant drop in market activity.
As the week closed, bitcoin was priced around $62,600, unable to regain the $65,000 level. Yusuf Fakhro, a partner at ARP Digital in Bahrain, attributes this decline to a lack of trading engagement rather than the Federal Reserve's recent announcements. The positive momentum from ETF investments seen in July has reversed, with nearly 4,000 BTC flowing out of the market this week after a period of consistent inflows.
The overall trading environment has quieted considerably, reaching its lowest average daily spot volume since November 2023. The open interest on the CME is back to levels seen earlier in the year, and perpetual-futures positions have plateaued at around 300,000 BTC.
Fakhro noted that the market appears to have withdrawn its participation, with Strategy pausing its bitcoin acquisitions for five consecutive weeks, indicating that even major buyers are stepping back.
The Federal Reserve's meeting on July 29 left interest rates unchanged, providing no easing signals that might have encouraged buyers.
A significant incident this week involved a security vulnerability in Coldcard firmware, which had been dormant since 2021. This flaw was exploited, resulting in the theft of approximately 1,367 BTC, valued at around $89 million, from numerous self-custodied wallets. Some affected holders have since transferred their assets back to exchanges or into regulated products.
On Monday, bitcoin traded at about $62,700, reflecting a 3.5% decrease for the week. Traders are advised to monitor the next inflow data: if ETF investments remain stable while prices hold, Fakhro's assessment of market exhaustion may be accurate. Additionally, if new outflows do not push prices below $60,000, it may indicate that sellers are finished.