Crypto ETFs Hit All-Time Highs, But Is a Downturn Looming?

Bitcoin is showing resilience around $108,700, seemingly unfazed by traditional markets reacting negatively to President Trump's potential tariff hikes. The proposed tariffs, targeting the EU and other regions, have rattled Asian equities and U.S. equity futures.

However, Bitcoin's stability suggests investors are either disregarding the macroeconomic noise or viewing it as a safe haven.

"Bitcoin’s slight price drop from Trump's tariff plans showcases the digital asset's resilient nature and long-term investor confidence,” said Han Xu, Director at HashKey Capital.

Despite this apparent strength, signs of market hesitation are emerging. Buyers seem to be losing momentum around the $110,000 mark. While dip buyers are active near the 50-day moving average, sellers remain equally strong.

Overall market capitalization, though still up 1.8% for the week, has dipped 0.6% in the last 24 hours to $3.35 trillion, indicating uncertainty at the top.

ETF Inflows Continue Despite Underlying Weakness

Crypto ETF inflows remain strong. CoinShares reported its 12th consecutive week of net inflows, with almost $1 billion entering crypto funds last week. Bitcoin ETFs accounted for $790 million of this influx, with Ether, Solana, and XRP also seeing significant inflows. Total ETF assets under management (AUM) have reached an all-time high of $188 billion.

• Ether (ETH): $226 million
• Solana (SOL): $22 million
• XRP: $11 million

However, on-chain data reveals a potential slowdown. Bitcoin's on-chain activity and implied volatility have fallen to their lowest levels in nearly two years, according to The Block. Glassnode describes this as a "summer lull," characterized by declining trading volumes and a growing concentration of unrealized gains among long-term holders. This could set the stage for a significant price move if market sentiment shifts.

Capital is still moving away from the 200-day moving average, indicating a bullish market bias. However, any change in tone could trigger swift profit-taking.

Key Takeaways:

• Crypto ETFs continue to attract significant inflows, reaching record AUM.
• Bitcoin remains relatively stable despite concerns in traditional markets.
• On-chain data suggests a potential "summer lull" and increased risk of a sharp correction.
• Market participants are bullish but hesitant, creating a potentially volatile environment.