Bitcoin Liquidity Rises By $8B as EFT Demand Stalls- Is The Rally Losing Steam?

Bitcoin ETF Inflows rebound is gaining traction as on-chain liquidity rises by roughly $8 billion, indicating increased confidence among long-term holders. However, despite increased optimism, U.S. spot Bitcoin ETFs have failed to attract major inflows, casting doubt on the current rally’s longevity, according to Cointelegraph.

After weeks of sideways movement, Bitcoin has begun to show signs of recovery, with the price holding around $68,500 as of writing. The surge coincides with a spike in on-chain activity, indicating that investors are once again transferring coins out of cold wallets and back into circulation.

$8 Billion In Profitable Coins Reflects Rising Confidence

On-chain data shows that Bitcoin’s “money vessel” measure, which represents coins held in profit, has increased by $8 billion in unrealized profits. This indicates improved market mood and increased profitability among existing holders.

Historically, such an expansion has frequently preceded better price movement as investors gain confidence in retaining their holdings rather than selling. It represents a better ecology in which revenues are increasing without excessive short-term speculation.

However, economists warn that a surge of successful coins does not always imply that additional money is entering the market. Instead, it could indicate that existing capital is simply increasing in value, not bolstered by new investments from institutions or ETFs.

Bitcoin ETF Inflows Remain Weak

While Bitcoin’s internal market structure seems strong, institutional involvement via exchange-traded funds has slowed. Top Bitcoin ETF inflows in the US have seen negligible or negative net inflows over the past week, according to well-known fund trackers.

This is in stark contrast to previous months, when ETF inflows fueled Bitcoin’s rally to all-time highs. Analysts point out that since their introduction, ETFs have been a key driver of institutional adoption, providing a regulated avenue for major investors to obtain exposure to Bitcoin.

“The lack of ETF inflows during this rebound could limit Bitcoin’s upward momentum,” said one expert to Cointelegraph. “Retail and on-chain activity are improving, but institutional demand remains muted.”

Market Reaction And Outlook

Despite the ETF slump, traders are cautiously hopeful. Bitcoin’s ability to hold current levels despite poor institutional demand implies that the market may be more robust than many predicted.

Short-term sentiment is now neutral to slightly optimistic, with technical signs pointing to a possible breakout if ETF flows resume their recent trend. Analysts are constantly monitoring macroeconomic trends and regulatory signs that might rekindle institutional interest.

Related: US Bitcoin ETFs Record $1.18B Inflows, Second Highest Ever During Crypto Market Rally

For now, Bitcoin’s $8 billion on-chain growth reflects a market in recovery—although one that lacks the external push of large-scale investors. Without increased Bitcoin ETF inflows participation, the rise may lose traction before retesting earlier highs.

As the larger crypto market stabilizes, the next several weeks will decide whether Bitcoin’s liquidity-driven rebound turns into a full-fledged bull run or fades into another consolidation period.