Bitcoin Reclaims $65,500 but Volatility Remains as US Liquidity Hits $5.92 Trillion

Bitcoin traded near $65,300 on July 26, recovering from spot ETF outflows of $465 million over two days that ended a seven-day inflow streak. The redemptions, $225.1 million on July 23 and $240.08 million on July 24, erased most of the prior week’s nearly $1 billion in inflows, but the broader weekly net remained positive at $33.79 million.

Despite the outflows, bitcoin remained in a tight range between $63,700 and $65,400. Ethra Invest CEO Saeed Al-Marri attributes the pullback to leveraged liquidations rather than a fundamental shift. “Longs are being liquidated six times as often as shorts (6 to 1), which tells you this is bullish bets getting wiped out, not a broad exit from the asset,” he said. A mid-July drawdown saw $62.63 million in long liquidations versus $10.52 million in shorts.

Meanwhile, U.S. net liquidity rose to $5.92 trillion, up over 3% in 12 weeks, reaching the 80th percentile of weekly observations since 2003. The Federal Reserve’s reverse repo facility nearly emptied, falling from a $2.37 trillion peak in September 2022 to a few hundred million dollars, directing more cash into markets including bitcoin.

The next catalyst is the August 12 CPI report, which could pressure the Fed if inflation runs hot, potentially tightening liquidity. Bitcoin has also shed over 160,000 BTC from spot ETFs since October 2025, the largest drawdown since the products launched in January 2024.

Source: https://news.bitcoin.com/bitcoin-etf-outflows-liquidity-5-92-trillion/