Bitcoin Tug-of-War: ETF Outflows, Rate Hikes, MSTR Buying

Bitcoin traded near $65,000 Monday, up about 1.3%, recovering from a weekly low around $62,300. The move follows a week of competing pressures: ETF outflows and hawkish Federal Reserve expectations on one side, corporate accumulation from MicroStrategy and Strive on the other.

Bitcoin (BTC-USD) ETF outflows picked up after the Fed's June meeting, data from fund issuers showed. The outflows reflect a broader rotation out of risk assets as traders priced in a third consecutive rate hike. The CME FedWatch tool now assigns a 60% probability to a 25-basis-point increase in July, up from 30% a month ago. The Fed's dot-plot from June showed two more rate hikes this year, a more aggressive stance than markets had priced, triggering a sell-off in risk assets.

Last week, the Bank of England raised its key rate by 50 basis points, surprising markets. That added to the global tightening bias and weighed on risk assets, including crypto.

MicroStrategy (MSTR) disclosed additional bitcoin purchases in a filing Thursday, bringing its total holdings to roughly 214,400 bitcoins. The company has funded its buying through cash and debt sales. MicroStrategy's own stock is down 8% year-to-date. Its Alpha Score, a proprietary measure of financial health and technical momentum, stands at 21 out of 100 – a weak rating. The score reflects concerns about the company's leverage and the gap between its bitcoin holdings and market capitalisation.

Strive Asset Management, the firm founded by Vivek Ramaswamy, also added to its bitcoin position in the past week, according to a regulatory filing. Strive's move was smaller in scale but signals that some institutional allocators still see value at current levels.

The push-and-pull has compressed bitcoin's trading range. Since early June, the cryptocurrency has oscillated between $62,000 and $68,000. The 50-day moving average sits just above $67,000, acting as resistance. The 200-day moving average near $60,000 provides support further out. The 30-day realised volatility has dropped below 50%, the lowest in two months, suggesting the market is awaiting a catalyst.

Wednesday's release of the minutes from the June Fed meeting could provide that spark. If the minutes show debate about the pace of tightening, traders may rethink the July hike. A hawkish tone would reinforce the dollar and cap crypto gains.

Ether (ETH-USD) also recovered Monday, trading 0.8% higher near $3,450. The broader crypto market has stabilised after a sharp sell-off in May.

Open interest in bitcoin futures has held steady near $40 billion, and funding rates are neutral. That suggests leveraged traders are not building excess positions. The basis between futures and spot is stable at around 5% annualised, reflecting a market that is neither heavily long nor short.

The next scheduled catalyst is July 12, when the consumer price index data is due. Until then, the range between $62,000 and $68,000 is likely to contain the price.