Key takeaways:
- A weakening U.S. dollar and higher government debt support rare assets, although outflows of spot Bitcoin ETFs and low retail demand raise some concerns.
- Traders expect Kevin Warsh to become Fed chairman, which could benefit Bitcoin.
Bitcoin (BTC) stagnated near $80,000 on Friday after being rejected at $82,500. Traders stepped up after U.S.-listed Bitcoin spot funds (ETFs) reported net outflows of $268 million on Thursday.
Meanwhile, $270 million in leveraged bullish Bitcoin futures positions were liquidated within 24 hours, forcing investors to assess whether a sustained bear market is finally in the works.
Daily net flows of US-listed ETFs, USD. Source: SoSoValue
A reversal in Bitcoin cash ETF flows on Thursday snapped a four-day positive streak. This change is especially noticeable because the S&P 500 index hit an all-time high on Friday. There is no evidence of a general mockery trend in established markets, as the U.S. small-cap Russell 2000 index remains within 2% of its own record high.
Are Bitcoin retail traders jumping ship?
Disappointing earnings reports from Coinbase and Robinhood showed a keen decline in retail engagement, raising concerns about Bitcoin’s sustainability. Coinbase saw a 31% drop in revenue compared to the first quarter of 2025, while cryptocurrency-related revenue at Robinhood dropped 47% over the same period.
Top investors on stock exchanges Ratio of long to compact Bitcoin positions. Source: CoinGlass
Top traders on Binance have cut their long positions in Bitcoin to the lowest level in over four weeks. In contrast, whales and market makers at OKX increased their bullish exposure as Bitcoin traded above $80,000 on Tuesday, but then reduced those positions on Friday.
Overall, the 0.27 long-to-short ratio among OKX’s top traders remains a far cry from the 1.20 level seen just ten days earlier.
A weaker US dollar and opportunities for strategic Bitcoin reserves
While Bitcoin derivatives are moderately bearish, two different factors are supporting the continued bull run. Over the past two months, the US dollar has weakened against other major fiat currencies. Whether intended by the U.S. administration or not, this move reduces incentives to hold U.S. Treasuries, especially given current high oil prices.
Brent crude oil, USD (left) vs US dollar strength index (right). Source: TradingView
Growing U.S. national debt creates an environment favorable to rare assets. Even if the stock market and gold remain the main options for most investors, Bitcoin tends to benefit from a weaker US dollar.
Regardless of the macroeconomic environment, expectations are growing that the US Strategic Bitcoin Reserve may begin adding BTC and Kevin Warsh is expected replace Fed chairman Jerome Powell in the near future. Warsh recently announced significant holdings in cryptocurrency assets and companies, and has previously expressed pro-Bitcoin views.
Related: Bitcoin bulls target 115,000. dollars until December – do the data confirm expectations?
Chances of the US adding any amount of Bitcoin to its reserves by 2027 Source: Polymarket
Although it is still considered a distant prospect, there is a way to go budget neutral strategies he was cited in the past by US Treasury Secretary Scott Bessent for acquiring Bitcoin. As a result, potential outflows from fixed income investments due to a weaker U.S. dollar and higher inflation enhance the chances of Bitcoin’s upward momentum continuing.
Recent outflows from spot Bitcoin ETFs do not necessarily indicate that a bear market is underway, even if the current positioning of top traders signals a lack of confidence in near-term growth.
