Bitcoin Stages Strong Recovery Amid ETF Inflows and Macro Tailwinds

Bitcoin’s price action on July 28, 2025, marked a significant turning point for the broader crypto market. After enduring weeks of persistent selling pressure, the world’s largest digital asset surged over 6% to break back above the $67,000 threshold. This sharp rebound in Bitcoin’s price came as investors reacted to a resumption in net inflows to U.S.-based spot Bitcoin ETFs and a noticeable decline in the U.S. dollar, which combined to lift sentiment across digital asset markets.

The move reversed much of the downside seen in mid-July, when Bitcoin fell as low as $63,100 amid risk-off trading and fund outflows. Monday’s rally not only brought price relief but also suggested that market structure and institutional confidence might be stabilizing.

Spot Bitcoin ETF Inflows Signal Return of Institutional Confidence

One of the most important developments fueling the bitcoin rebound after ETF inflows was the dramatic shift in institutional activity. After nearly three weeks of consistent net outflows from spot Bitcoin ETFs, over $315 million in fresh capital entered the market on July 28 alone. The inflows were led by major products such as:

• BlackRock’s iShares Bitcoin Trust (IBIT) – accounting for $138 million

• Fidelity Wise Origin Bitcoin Fund (FBTC) – with $91 million in inflows

• Grayscale Bitcoin Trust (GBTC) – recording its first positive day in nearly a month

ETF flows are widely considered a real-time barometer of institutional sentiment, and the sudden reversal has traders re-evaluating their outlook. Analysts at JPMorgan noted that the sharp turnaround “indicates renewed conviction among allocators after pricing adjustments and macro clarity.”

These inflows helped restore liquidity to the crypto market, reduced volatility in order books, and tightened bid-ask spreads—key signs of market health returning.

Weaker U.S. Dollar Provides a Macro Tailwind for Crypto Assets

Crypto markets also caught a strong tailwind from macroeconomic conditions. The U.S. Dollar Index (DXY), which tracks the greenback against a basket of major currencies, fell sharply to 101.9, marking its lowest level since early June. The drop followed dovish commentary from Federal Reserve Chair Jerome Powell during a weekend economic summit, where he suggested that inflation data “warrants caution, not aggression.”

With bond yields retreating and real interest rates declining, investors have been rotating back into risk-sensitive assets such as tech equities and cryptocurrencies. As Bitcoin is often viewed as a hedge against fiat devaluation and an alternative asset in periods of dollar weakness, its appeal surged under the latest macro backdrop.

This dynamic—strong ETF demand combined with dollar weakness—created a powerful setup for a breakout rally.

Altcoins Follow Bitcoin’s Lead with Broad-Based Gains

Bitcoin’s strength rippled across the entire crypto landscape. Ethereum (ETH) jumped over 4% to trade above $3,500, while Solana (SOL) rallied 6.8%, regaining the $88 mark. Avalanche (AVAX), Polkadot (DOT), and Chainlink (LINK) also posted 24-hour gains of more than 5%.

This altcoin bounce coincided with rising network activity and stronger inflows into decentralized finance (DeFi) platforms. Total value locked (TVL) in DeFi increased by $1.2 billion according to DefiLlama, indicating fresh capital entering the ecosystem.

Moreover, trading volume on centralized exchanges such as Binance, Kraken, and Coinbase rose 18% from Friday’s session, suggesting a return of speculative appetite and momentum-driven participation.

On-Chain Data Confirms Bullish Trend Reversal

Blockchain analytics confirm the growing strength beneath the surface. According to Glassnode and CryptoQuant:

• Exchange Outflows: Bitcoin withdrawals from exchanges surged to a 6-week high, signaling accumulation and long-term confidence.

• Active Addresses: The number of active addresses climbed 5.7% week-on-week, indicating broader user engagement.

• Futures Funding Rates: Turned positive again, suggesting that traders are increasingly paying to go long—another bullish signal.

• MVRV Ratio: Suggests Bitcoin is once again entering a value accumulation zone, historically associated with major uptrends.

Additionally, the Bitcoin Fear & Greed Index moved from “Fear” (38) to “Neutral” (54), underscoring the shift in trader psychology from caution to cautious optimism.

Regulatory Calm Also Supporting Sentiment

Another important aspect of the recovery was the relative lull in regulatory headlines. After several months of tension between the crypto industry and regulators—including ongoing cases involving the SEC, Coinbase, and Ripple—the week began without any major enforcement actions or warnings.

Industry insiders believe this regulatory “pause” could give room for price discovery and investor re-engagement without fear of sudden crackdowns. This allowed markets to focus on fundamentals, macro trends, and actual adoption metrics rather than legal noise.

What Comes Next for Bitcoin and Crypto Markets?

While the bitcoin rebound after ETF inflows is promising, traders remain watchful for the next catalysts. Several high-impact data releases are on the calendar, including:

• U.S. PCE Inflation (July) – critical for Fed trajectory

• Eurozone GDP and CPI – with global monetary implications

• Asian Tech Earnings – which often correlate with digital asset performance

Technically, Bitcoin faces resistance near $69,500—the key barrier that capped rallies in late June. A confirmed breakout above that zone could open the path toward a retest of the $72,000 level. On the downside, support is seen near $65,200, which marks the breakout zone from earlier this year.

Conclusion

The recent bitcoin rebound after ETF inflows and a softening dollar has reignited momentum across the cryptocurrency market. For the first time in weeks, traders and investors are breathing easier, supported by institutional activity, improving macro conditions, and growing on-chain engagement.

While risks remain and volatility is never far away in the crypto space, the current landscape offers a cautiously bullish setup heading into August. As always, disciplined risk management and close attention to global trends remain essential.