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After a Record-Breaking July, Bitcoin Falls to a Three Week Low

August 2, 2025
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Bitcoin extended its losing streak to a fifth consecutive session as traders continued to scale back positions following July’s record-setting rally that had been fueled by enthusiasm over the U.S. government’s growing acceptance of digital assets. The leading cryptocurrency slid as much as 2% to $114,128 on Friday, marking its lowest level in three weeks. This comes after Bitcoin hit an all-time high of $123,200 on July 14, just days before former President Donald Trump signed into law the first comprehensive U.S. regulatory framework for cryptocurrencies.

Ether, the second-largest digital asset by market capitalization, also retreated, dropping as much as 3.13% to $3,617. The broader cryptocurrency market, which surpassed a $4 trillion total valuation for the first time in July, has since cooled, with momentum waning in recent sessions.

July’s historic rally was largely driven by massive inflows into crypto-focused exchange-traded funds (ETFs). U.S. Ether ETFs recorded $5.4 billion in net inflows last month, marking their strongest month ever. Bitcoin ETFs also saw robust demand, attracting $6 billion in inflows—the third-best monthly performance on record, according to Bloomberg data. However, that influx of capital has slowed significantly, with ETF flows tapering and institutional activity showing signs of weakening demand.

“The recent price action reflects a fading sense of euphoria and a partial withdrawal of speculative capital,” said Linh Tran, a market analyst at XS.com. “Bitcoin’s inability

to climb higher has been driven largely by increased caution from institutional investors.”

Evidence of waning U.S. interest can be seen in Bitcoin’s Coinbase premium—a metric that measures the difference in Bitcoin’s price on Coinbase compared to other exchanges—which turned negative this week for the first time in nearly two months, according to CryptoQuant data. Additionally, open interest in Bitcoin futures on the Chicago Mercantile Exchange (CME) has dropped 13% since its July peak, while Ether futures have seen an even sharper decline of 21%.

Shares of Coinbase Global Inc., the largest cryptocurrency exchange in the U.S., also took a hit on Friday after reporting second-quarter revenues that fell short of analyst estimates. The exchange attributed the revenue miss to reduced market volatility in digital assets, which led to lower trading volumes.

Options market data further underscores the growing bearish sentiment. “The 30-day skew for Bitcoin has shifted from +3% to -1.5%, meaning that put options are now more expensive than call options,” explained Nick Forster, founder of crypto options platform Derive.xyz. “This reflects strong demand for downside protection as traders brace for one to two months of bearish price movement.”

Forster also pointed to significant profit-taking activity in late July as another factor weighing on prices. “We saw realized profits in the range of $6–8 billion toward the end of July, indicating that institutions, having achieved substantial gains, were reducing their exposure ahead of what could be a volatile third quarter,” he said.

The selling pressure has been evident in over-the-counter transactions as well. On July 15 alone, approximately $10 billion worth of Bitcoin was sold through OTC desks, leading to a brief 4% price decline. Miners contributed to the downward pressure by offloading around 15,000 BTC shortly after Bitcoin hit new all-time highs, locking in profits as prices peaked.

The combination of profit-taking, declining institutional participation, and increased hedging activity suggests that Bitcoin and the broader cryptocurrency market may face continued headwinds in the near term. While July marked a milestone for digital assets—with record highs, landmark U.S. regulatory developments, and unprecedented ETF inflows—the rally has given way to a more cautious environment.

Investors and traders now appear focused on risk management as they navigate what could be a choppy third quarter for cryptocurrencies. As Tran summarized, “The excitement around digital asset adoption remains intact, but for now, the market is undergoing a necessary recalibration after an extraordinary surge.”

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Eric Ng
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John Liu
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