Bitcoin (BTC) is showing a mild recovery on Friday, bouncing off its long-term support area above $65,400 after a prolonged decline. The cryptocurrency continues to draw support from sustained inflows into US spot Bitcoin exchange-traded funds (ETFs), which have now extended into a third consecutive week of net inflows. However, rising geopolitical tensions, higher crude oil prices, and renewed inflation fears are capping upside momentum.
ETF Inflows Remain Steady
Institutional demand remains positive despite the challenging macroeconomic backdrop. According to SoSoValue data, US spot Bitcoin ETFs recorded net inflows of $273.87 million by Thursday. If Friday’s figures remain positive, it will mark the third straight week of net inflows. While the pace is moderate compared to the heavy outflows seen between mid-May and early July, the consistent buying suggests institutional investors are gradually returning to the market. Continued ETF inflows could provide a crucial buffer against downside risks if geopolitical uncertainty persists.
Regulatory Progress: CLARITY Act Gains Traction
On the regulatory front, US Senate Republicans have released a draft of the Digital Asset Market Clarity (CLARITY) Act, which appears to be the final version. The bill could be fast-tracked before the summer recess of Congress, potentially providing much-needed market structure for cryptocurrencies. The new draft includes stricter ethics rules that would ban the President, high-ranking officials, and their spouses from issuing or sponsoring digital assets during their tenure. Officials would also be required to sell qualifying crypto assets or place them in blind trusts, with enforcement handled by the Department of Justice through civil suits.
With lawmakers expected to turn their attention to the November mid-term elections after the summer break, early August may be the last realistic window for the legislation to advance. If enacted, the CLARITY Act could be a game-changer for Bitcoin, offering regulatory clarity that boosts investor trust and adoption.
Technical Outlook: Key Levels to Watch
Bitcoin is trading near $63,800 on Friday, below its 50-day Exponential Moving Average (EMA) at $64,847. The weekly close is shaping up to be bearish. The path of least resistance points toward the psychological support at $60,000, followed by the June 25 low of $58,115.
The Relative Strength Index (RSI) has dropped to 48, indicating that bearish momentum is regaining strength as it falls below the neutral 50 level. Meanwhile, the Moving Average Convergence Divergence (MACD) has made a bearish cross this week, further suggesting that selling pressure could continue.
On the upside, the 50-day EMA at $64,847 remains a critical resistance level. A bullish close above this line could revive recovery efforts, targeting the $70,000 round figure and then the 200-day EMA near $73,040.
Frequently Asked Questions
1. Why is Bitcoin struggling to extend its recovery?
Bitcoin’s rebound is being limited by rising geopolitical tensions, higher crude oil prices, and renewed inflation concerns. These factors have reduced demand for riskier assets and kept BTC below its key moving averages.
2. What do the latest Bitcoin ETF inflows indicate?
According to SoSoValue, US spot Bitcoin ETFs recorded $273.87 million in net inflows by Thursday. Continued positive flows could mark a third consecutive week of inflows and provide support against further downside.
3. How could the CLARITY Act affect Bitcoin?
The CLARITY Act could establish clearer rules for the US digital asset market. Greater regulatory certainty may improve institutional confidence, encourage adoption, and reduce legal uncertainty across the cryptocurrency sector.
4. What are Bitcoin’s key support levels?
The first major downside target is the psychological $60,000 level. A break below it could expose Bitcoin to the June 25 low near $58,115, where buyers may attempt to defend the market.
5. What resistance must Bitcoin overcome to turn bullish?
Bitcoin must reclaim the 50-day EMA at $64,847 to strengthen its recovery. A sustained close above this level could open the way toward $70,000, followed by the 200-day EMA near $73,040.
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