Short-term volatility masks institutional momentum

TLDR

• Bitcoin closed the week at US$63,570 (A$90,269), down 2.80%, after trading between US$62,475 (A$88,715) and US$65,100 (A$92,442).
• US spot Bitcoin ETF flows remained mixed, while cumulative net inflows held at US$51.32 billion (A$72.87 billion).
• Ethereum ETFs continued attracting institutional demand, outperforming Bitcoin over the past 10 trading sessions.
• Decentralised exchanges captured a record 24.14% share of July spot trading volume.
• A Coldcard hardware wallet firmware vulnerability, rather than the Bitcoin network itself, was linked to a US$70 million (A$99.4 million) theft.
• Markets now turn to the CLARITY Act, Circle and MARA earnings, and major token unlocks.

Introduction

Crypto markets entered August on softer footing, with Bitcoin trading within a familiar range and most major digital assets ending the week lower. While short-term price action remained subdued, institutional participation continued evolving, decentralised trading activity reached new highs and investors shifted their focus towards several key events that could shape market direction in the week ahead.

Weekly trading stats as of Monday, August 3rd at 10:00 AM AEST, based on data from TradingView in USD.

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Bitcoin trades within a familiar range ahead of key technical tests

Bitcoin closed the week at US$63,570 (A$90,269), down 2.80%, after trading between US$62,475 (A$88,715) and US$65,100 (A$92,442). Despite the softer weekly performance, price action remained largely range-bound rather than directional, suggesting traders continue waiting for a clearer catalyst.

Technical attention is now focused on Bitcoin's 50-day exponential moving average (EMA), with a successful reclaim potentially opening the door to a move towards the low US$67,000s (A$95,140). At the same time, Bitcoin continues testing important long-term support levels, reinforcing the significance of current price action for both traders and longer-term investors.

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Daily ETF flows tell only part of the institutional positioning story

While price action remained subdued, institutional activity painted a more nuanced picture. Friday's US spot Bitcoin ETFs recorded a US$265.37 million (A$376.83 million) net outflow, reversing Thursday's US$233.1 million (A$331 million) inflow.

Despite the day-to-day volatility, cumulative net inflows remain robust at US$51.32 billion (A$72.87 billion), with total net assets of US$76.29 billion (A$108.33 billion) representing approximately 6.04% of Bitcoin's market capitalisation.

Ethereum told a different story, recording a US$9 million (A$12.78 million) daily inflow led by BlackRock's staked ETF. Across the past 10 trading sessions, Ethereum ETFs attracted US$113.8 million (A$161.60 million), while Bitcoin ETFs recorded US$27.6 million (A$39.19 million) in net outflows. Rather than signalling investors are leaving digital assets, the figures suggest institutional portfolios continue rotating across the sector.

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On-chain activity and XRP inflows point to evolving market participation

Institutional flows were only one part of the week's activity. Participation across the digital asset ecosystem also continued evolving, with decentralised exchanges capturing a record 24.14% share of July spot trading volume. Solana remained a key driver of on-chain activity, while XRP ETFs extended their four-month inflow streak, highlighting continued investor interest beyond the market's two largest assets.

Elsewhere, one of the week's largest security incidents involved approximately US$70 million (A$99.4 million) worth of Bitcoin linked to a firmware vulnerability affecting certain Coldcard hardware wallets. The issue stemmed from a device-level flaw in seed generation, not any weakness in the Bitcoin protocol, which continued operating normally throughout.

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Regulation, earnings and token unlocks could shape the market's next move

With institutional flows and market participation providing a constructive backdrop, attention now turns to the events that could determine crypto's next direction. Easing tensions around the Strait of Hormuz reduced pressure on global oil markets over the weekend, limiting spillover into digital assets. Investors will also be watching the Senate's narrow window to progress the CLARITY Act before recess, alongside Circle's second-quarter earnings, MARA's earnings on 6 August and concentrated token unlocks across ENA, AVAX, CONX, ZRO and KAITO.

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Final thoughts

Markets rarely move in a straight line, and this week was another reminder that short-term volatility does not always reflect the underlying trend. Daily ETF flows remained mixed, yet cumulative institutional allocations stayed firmly intact as capital continued rotating within digital assets and on-chain participation kept strengthening. Attention now shifts from last week's headlines to the catalysts ahead, with regulation, earnings and key technical levels all capable of influencing sentiment. A reclaim of Bitcoin's 50-day EMA could strengthen momentum towards the low US$67,000s (A$95,140). Until then, range-bound trading may continue as investors wait for a stronger catalyst.

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