Bitcoin slipped below $63,000 on Friday, falling to $62,812 as an expected post-CPI relief rally failed to materialize, with institutional investors pulling money out of spot ETFs just days after recording their strongest weekly inflows since April.
The world’s largest cryptocurrency dropped 0.92% over 24 hours and 3.34% over the past week, extending a pullback that began after Wednesday’s July CPI report. Consumer prices rose 0.1% month-over-month and 3.4% year-over-year, exactly matching economist forecasts. In a typical cycle, an in-line cooling inflation print would have triggered a relief rally. This time, it did not.
ETF Flows Reverse Sharply
US spot Bitcoin ETFs recorded significant outflows in the days immediately following the CPI release, a sharp reversal from the $854.54 million in net inflows logged during the week ending August 7. The ARK 21Shares Bitcoin ETF (ARKB) led redemptions with $58.8 million, followed by Fidelity’s FBTC at $55.1 million. Together, the two products accounted for 64.3% of total outflows across seven ETFs that recorded redemptions.
Analysts say the mechanical relationship between cooling inflation and ETF buying has weakened. Flows now follow price momentum more closely than macro data releases, meaning a benign CPI print no longer guarantees fresh institutional demand. Strategy, the largest corporate Bitcoin holder, also added to sell-side pressure with further BTC disposals during the same window.
Fear Grips the Market
The Crypto Fear and Greed Index dropped to 30, firmly in “Fear” territory, its lowest reading in weeks. Open interest in Bitcoin futures fell 2.16% to $47.95 billion, signaling deleveraging rather than fresh short positioning. Long liquidations dominated, making up 89.5% of $18 million in total liquidations over 24 hours, suggesting that overleveraged bulls are being forced out of positions as support levels crack.
Bitcoin’s key support zone sits at $62,500 to $63,000. A decisive break below could trigger a cascade of long liquidations, while reclaiming $65,000 to $67,000 would be needed to signal a bullish reversal. The asset remains well below its July 22 monthly high of $66,601.
Hash Rate Retreat as Miners Pivot to AI
The Bitcoin network’s overall hash rate has retraced approximately 17% from its all-time high, currently standing at 841 exahashes per second. The decline is not driven by miner capitulation but by a structural shift: mining enterprises are repurposing infrastructure originally built for Bitcoin toward artificial intelligence computing. Long-term power supply contracts signed at low rates by mining facilities are highly attractive to AI data centers, and as firms pivot, the computing power securing the Bitcoin network is being reallocated.
While the hash rate remains far above historical averages and attack risks remain manageable, the economic model underpinning Bitcoin mining is undergoing a fundamental restructuring. The broader crypto market reflects this uncertainty, with Ethereum trading at $1,877, down 1.89% weekly, and XRP slipping below $1.00. Only Chainlink bucked the trend, rising roughly 9% on the week.
Sources: KuCoin; NAI 500; BlockchainReporter; CoinStats; CoinMarketCap
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