Bitcoin rebounded to around $61,800 on Friday after plunging to a 21-month low of $57,800 earlier in the week. Despite the recovery, sentiment remains cautious as US-listed spot Bitcoin ETFs experienced net outflows totaling $526.64 million through Thursday, marking an eighth straight week of withdrawals. Analysts suggest that quarter-end portfolio rebalancing by institutional investors could offer near-term support and help stabilize Bitcoin prices.
Bitcoin (BTC) has gained more than 3% this week and was trading above $61,800 on Friday, recovering from a drop to a 21-month low earlier in the week. Despite the rebound, institutional selling pressure remained evident, as spot Bitcoin Exchange-Traded Funds (ETFs) registered net outflows exceeding $526 million through Thursday, putting the market on track for an eighth consecutive week of withdrawals. Analysts, however, believe quarter-end portfolio rebalancing could offer temporary support for the leading cryptocurrency.
Institutional outflows remain a headwind
Institutional appetite for Bitcoin continued to weaken throughout the week. According to SoSoValue data, spot BTC ETFs recorded cumulative net outflows of $526.64 million by Thursday. Unless Friday sees a substantial reversal in fund flows, Bitcoin ETFs will log their eighth straight week of net withdrawals. The persistent outflows suggest institutional investors remain cautious, leaving the market with limited support as Bitcoin recently fell to a 21-month low of $57,800.
Meanwhile, a recent report from CryptoQuant pointed to growing signs of heightened volatility ahead. The firm noted that Bitcoin exchange inflows surged to nearly 50,000 BTC in a single day, reaching levels seen only four other times in 2026. On Tuesday alone, approximately 49,000 BTC flowed into exchanges, an unusually large amount that has historically coincided with periods of significant price swings.
CryptoQuant analysts emphasized that the increase in exchange deposits occurred while Bitcoin was testing the key $60,000 support zone. A decisive break below that level could open the door for a decline toward $53,000, which corresponds to Bitcoin’s realized price.
The report added that such elevated inflow activity indicates a substantial volume of Bitcoin is being transferred to exchanges, a pattern that has often preceded major directional moves in the market.
Progress in US-Iran talks supports Bitcoin rebound
Improving sentiment around geopolitical developments helped Bitcoin recover during the second half of the week, with BTC climbing back above $61,000 after plunging to a 21-month low of $57,800 on Wednesday.
On Wednesday, Qatar’s Foreign Ministry reported that the United States and Iran had achieved “positive progress” in indirect negotiations held in Doha, with discussions advancing matters linked to the June ceasefire framework. Officials noted that the talks were building on outcomes from a recent summit in Switzerland, fueling optimism that a more lasting agreement could be reached.
US President Donald Trump also expressed confidence in the negotiations, stating that progress had been made regarding potential restrictions on Iran’s nuclear program and that denuclearization efforts were moving forward. Meanwhile, Vice President JD Vance indicated that nuclear-related issues would likely be addressed in future discussions.
The next round of negotiations is expected after the funeral ceremonies for Ayatollah Ali Khamenei, whose burial is scheduled for July 9.
Despite the improved outlook, uncertainty surrounding the Strait of Hormuz remains a key risk factor. Although shipping traffic through the strategic waterway has recovered significantly, volumes remain below pre-conflict levels. Market participants will continue monitoring developments in the Middle East, as any resurgence in tensions between Washington and Tehran could quickly undermine risk sentiment and trigger renewed selling pressure in assets such as Bitcoin.
Softer US labor data eases pressure from Fed expectations
On the macroeconomic front, weaker-than-expected US employment figures have reduced expectations for further Federal Reserve tightening, creating a more favorable environment for risk assets.
Investor expectations for additional rate hikes declined after Thursday’s labor market report showed the US economy added just 57,000 jobs in June, well below forecasts of 110,000. In addition, the previous month’s payroll figure was revised lower from 172,000 to 129,000, while the unemployment rate edged down to 4.2%.
The softer labor market data, combined with easing inflation concerns driven by lower crude oil prices, prompted traders to scale back expectations for future Fed tightening. Markets shifted from anticipating one or two rate hikes in 2026 to pricing in anywhere between no hikes and a single increase. This reassessment weakened the US dollar and provided additional support for Bitcoin’s recovery.
Could quarter-end rebalancing become Bitcoin’s next catalyst?
A recent report from K33 Research suggests that quarter-end portfolio rebalancing may offer a short-term boost for Bitcoin.
According to the study, ETF flow patterns during the six trading days surrounding month-end—three sessions before and three sessions after—have frequently diverged from prevailing monthly trends. Over the past 18 months, this phenomenon was observed in half of the sample periods.
K33 analysts noted that several months in which Bitcoin underperformed the S&P 500 were followed by stronger ETF inflows around month-end and during the opening days of the following month. This behavior is consistent with portfolio rebalancing, where investors increase Bitcoin allocations after periods of relative weakness to restore target weightings within diversified portfolios.
However, the analysts cautioned that the relationship is not always consistent. Roughly half of the observed periods failed to exhibit the same pattern, suggesting that rebalancing is only one of several factors shaping institutional demand for Bitcoin.
That said, the trend has become increasingly noticeable over the last four quarters. If it persists, quarter-end portfolio adjustments could provide a meaningful tailwind for Bitcoin, potentially supporting a recovery during the opening trading sessions of July.
Market analysts remain divided on whether quarter-end portfolio rebalancing can provide a meaningful boost to Bitcoin’s outlook.
According to Ryan Lee, Chief Analyst at Bitget, quarter-end rebalancing may generate short-term trading activity, but it is unlikely to alter Bitcoin’s broader market direction. He noted that BTC has been trading in a relatively tight range between $58,000 and $62,000 after losing roughly 14% during the second quarter, while continued spot ETF outflows and weakening institutional demand remain significant headwinds.
Lee explained that portfolio adjustments can trigger opportunistic buying when cryptocurrency allocations fall below target levels. However, he emphasized that Bitcoin’s next major move will likely depend more on factors such as ETF flows, macroeconomic developments, and overall investor risk appetite than on routine portfolio rebalancing.
Dean Chen, an analyst at Bitunix, expressed an even more cautious view. In his assessment, quarter-end rebalancing is unlikely to act as a meaningful bullish catalyst for Bitcoin and should instead be viewed primarily as a short-term liquidity redistribution process rather than a source of new capital entering the market.
Chen noted that in a prolonged downtrend, rebalancing flows can work in either direction. While some investors may increase exposure to underweighted risk assets, generating temporary buying pressure, others may choose to cut positions as part of broader risk-reduction and deleveraging strategies.
As a result, he believes quarter-end rebalancing is more likely to increase short-term market volatility than establish a sustained directional trend. In his view, the process merely reallocates existing capital rather than introducing fresh funds into the market.
Consequently, Chen argues that quarter-end portfolio adjustments should be treated as a temporary market influence rather than a structural driver capable of changing Bitcoin’s longer-term trajectory. Instead, the cryptocurrency’s broader outlook will continue to be shaped by institutional demand, ETF flows, macroeconomic conditions, and overall market sentiment.
Technical Outlook: Is Bitcoin Forming a Bottom?
Bitcoin rebounded more than 3% this week, climbing above $61,800 on Friday after finding support near a long-term ascending trendline that has connected major lows since January 2023. Despite the recovery, BTC still recorded a fresh yearly low of $57,800 earlier in the week, marking its weakest level since September 2024.
On the weekly timeframe, maintaining support around the $58,000 trendline remains critical for the bullish case. If buyers continue defending this area, Bitcoin could extend its rebound toward the 200-week Simple Moving Average (SMA) near $62,652. A decisive weekly close above that level would strengthen the recovery outlook and potentially open the door for a move toward the 78.6% Fibonacci retracement level at $65,520, measured from the August 2024 low of $49,000 to the October 2025 record high of $126,199.
However, longer-term momentum indicators continue to flash warning signs. The Relative Strength Index (RSI) on the weekly chart has fallen to around 35 and is approaching oversold territory, reflecting persistent bearish pressure. Meanwhile, the Moving Average Convergence Divergence (MACD) generated a bearish crossover in late June and remains in negative territory, reinforcing the broader downtrend.
Should Bitcoin break below the ascending trendline and close the week under the $58,000 area, selling pressure could intensify, exposing the next major support zone around $55,777.
On the daily chart, BTC has recovered from its recent 21-month low but still trades below its key moving averages, keeping the broader trend tilted to the downside. The cryptocurrency remains beneath the 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs), located at approximately $66,028, $69,826, and $75,782, respectively.
The daily RSI has improved to around 44 but remains below the neutral 50 level, suggesting that buying interest is recovering only gradually. At the same time, the MACD has turned positive, with the MACD line moving above both its signal line and the zero line, indicating improving momentum. Nevertheless, the recovery remains insufficient to fully offset the prevailing bearish structure.
From a resistance perspective, Bitcoin faces its first significant hurdle near $64,000. A successful break above this level would bring the 50-day EMA at $66,028 into focus, followed by the 100-day EMA at $69,826 and the 200-day EMA at $75,782. Beyond those levels, a more substantial resistance zone emerges around $84,410.
Conversely, if Bitcoin fails to regain and sustain trading above the $64,000 region, downside risks could re-emerge. In that scenario, the market may retest lower support levels, with the psychologically important $55,000 area serving as the next major target for bears.
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