Bitcoin CEX and ETF flows suggest negative newsflow, such as Strategy selling and another CLARITY Act delay, is priced in. What will it take to sustain the bullish momentum?
Late-week, POLITICO reported another hiccup in the CLARITY Act securing enough support from US senators to reach a floor vote before a month-long recess begins. Recurring concerns over the impact of stablecoin integration on banks and Senators’ concerns about President Trump’s crypto involvement led some lawmakers to withhold support, shifting the timeline for a floor vote to September.
Senate Majority Leader John Thune said,
“The Dems insisted on no Clarity vote.”
According to POLITICO, in comments to reporters, Thune said, “We’re getting that queued up first thing [when] we come back in September.” Democrats in the Senate are focused on including a clearer framework on government ethics. A counteroffer during last-minute negotiations included a divestment requirement. It would effectively force federal officials and the president to sell stakes in digital asset companies if the position’s value exceeds $1 million or more than 10% of the company’s value.
Following the trend of the last few weeks, crypto majors initially shook off the CLARITY Act delay, reinforcing the view that such delays are priced into day-to-day market moves.
Prediction markets remain split: Polymarket shows a 14% chance and Kalshi shows a 67% chance of passing in 2026. Following Thune’s announcement, Bitcoin (BTC) held the $64,000 level, which has been BTC’s average daily price since July 5. Ether (ETH) held above $1,800, up 7% over the past 30 days.
Clarity Act odds market at Polymarket. Source: Polymarket
In the absence of regulatory progress on Capitol Hill, the market structure across various corners of the crypto market continues to align with a prolonged bottoming process.
With the CLARITY Act kerfuffle and the Coldcard hack now in the rearview, traders will shift their focus to the Aug. 12 CPI print, the Jackson Hole Economic Policy Symposium on Aug. 27-29, and the Sept. 15-16 FOMC to gain color on the Fed’s intentions on interest rates.
The Rundown
- Spot BTC and ETH ETF Inflows Line Up With Futures’ New Risk-On View
- Bitcoin’s the Laggard, but Still Tracks the 4-Year Cycle
- The Ball is in the Fed’s Court
- What’s on the Radar?
Spot BTC and ETH ETF Inflows Line Up With Futures’ New Risk-on View
The spot ETF bid carried over to a second month with Aug. 6 registering $626 million in three-day inflows. While the Crypto Fear & Greed Index showed investor sentiment lingering in the “fear” zone with a reading of 39, liquidation heatmap data shows bulls stand to benefit from short liquidations up to $70,000 if the $65,000 ceiling is broken.
BTC liquidation heatmap. One-month lookback. Source: Hyblock
Across the week, Bitcoin cumulative volume delta data shows the routine capitulation-to-accumulation flow in place. Futures markets continue to dominate price action, with liquidation-driven selling absorbed by discount buyers around $62,000.
On Aug. 3, more than $500 million in selling reflected traders’ response to a Strategy SEC 8-K filing and a company announcement reporting a 1,638 BTC ($104.7 million) sale between July 27 and Aug. 2. Proceeds from the sale were used to fund $52.4 million in preferred stock dividends, and the remaining $52.3 million was used to repurchase STRC.
Saylor also clarified that, going forward, Strategy may buy or sell BTC for capital management, and that future fundraises may fund the cash reserve rather than Bitcoin purchases alone.
By Aug. 6, Bitcoin spot and futures CVD flows were net long, with $1.46 billion in positioning, adding pressure to the current ceiling at $65,000. The Aug. 7 Asia and New York session flows topped $752 million combined across two 4-hour candles.
Bitcoin spot and futures cumulative volume delta. Source: Hyblock
This multi-week trend involves futures activity pressing the price into resistance, followed by either profit-taking or negative news flow. This triggered long liquidations and the emergence of discount buyers near $62,000.
Bitcoin’s the Laggard, but Still Tracks the 4-Year Cycle
Bitcoin remains in a cyclical bottoming-and-consolidation phase, which is customary at this point in every four-year cycle. The catalysts and figureheads change with each cycle, but the price action trends pretty much remain the same.
In its Aug.6 newsletter, Glassnode analyst Frederik Theissen said that “the institutional bid of the last 2 years [is still] running in reverse”. June saw corporate treasuries and funds return over 65,000 BTC to the market, which was the largest volume of selling on record. By contrast, in 2024 these same entities gobbled up 218,000 BTC.
The on-off trend of Bitcoin doing nothing while the Dow, S&P 500, gold, silver and oil run toward new highs continues. Meanwhile, BTC remains capped under its $70,000 to $80,000 ceiling.
Despite being the market laggard, Bitcoin's discount perception persists, and negative news flow seems priced in.
Bitcoin price action lags stocks and commodities. Source: Glassnode
The Ball Is in the Fed’s Court
Interest rate hike odds for the Sept. 16 FOMC dropped from 62% a few days ago to 44% today following the Aug. 7 jobs report, which showed the unemployment rate slipping to 4.1% alongside a drop in job creation.
This reduced expectations for a 25-basis-point rate hike for September, prompting the stock market and crypto rally seen at the New York open, but investors’ risk appetite could shift in the coming weeks as upcoming events on the economic calendar may chisel away at the consistent bid seen on Bitcoin and ETH since June.
CPI data is released on Aug. 12, followed by the Jackson Hole Economic Policy Symposium at the end of the month.
The current read from the Fed is that inflation remains sticky, but the labor market is resilient, despite data highlighting softening. In the view of the Fed, the energy price shock from the US-Iran war and the resulting closure of the Strait of Hormuz is a manageable event that has not yet severely damaged the economy.
What’s on the Radar?
- CPI data releases on Aug. 12. Bitcoin traders tend to cut risk ahead of economic data releases. Is a brief sell-off to the $62,000 support on the cards?
- Risk appetite returned to stocks and crypto following the Aug. 7 jobs report, pricing out rate hikes in September. Will this bullish momentum flip $65,000 to support for BTC and $2,000 to support for Ether? Will the momentum carry over into this week?
- Citadel says the AI bull market is back on full speed. Will crypto’s trend of lagging AI hyperscalers and tech stocks continue to keep new capital flows constrained?
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