The truth behind Bitcoin's big dump at the end of July: ETF fund outflows and profit selling are the main reasons.

July was originally a peak period for Bitcoin (BTC) prices, with global demand pushing BTC to briefly exceed $123,000. However, by the end of the month, the market suddenly turned, and Bitcoin fell 7-8% in just a few days, sparking heated discussions among investors. What exactly triggered this big dump? This article will analyze the core driving forces behind the decline of Bitcoin at the end of July, using CryptoQuant data for in-depth insights.

Profit-taking sell-off wave strikes, institutions and OG holders exit simultaneously

As the price of Bitcoin reached an all-time high, some long-term holders, miners, and institutions chose to take profits at the peak. At the end of July, Galaxy Digital sold up to 80,000 BTC for its clients, with a market value of about 9 billion USD, becoming the largest single event in this round of sell-off. This wave of selling pressure came not only from institutions but also included OG holders deciding to exit, significantly increasing market selling pressure in a short period.

ETF fund outflows intensify fall, demand gap difficult to fill

Despite the strong overall performance of ETFs in July, there was a significant outflow of funds at the end of the month. According to SoSoValue data, from July 31 to August 1, over $920 million flowed out of ETFs. CryptoQuant charts show that ETF inflows are unstable and sporadic, lacking new demand to fill the funding gap, which further amplifies the downward pressure on Bitcoin prices.

Macroeconomic and policy variables failed to provide support

The U.S. economic growth rate reached 3%, but the Federal Reserve chose to keep interest rates unchanged at the July meeting, failing to bring the expected easing policy to the market. President Trump publicly pressured for a rate cut, but Fed Chairman Powell did not yield. The cautious sentiment in the macro environment has left the market lacking new bullish stimuli, contributing to short-term pullbacks.

Market Outlook: Divergence Between Bulls and Bears, Market Confidence Awaiting Recovery

Bitcoin has experienced severe fluctuations, leading to a clear divergence in market sentiment. Coinglass's liquidation heat map shows that investors remain confident in BTC's rise to $120,000, but technical analyst Michaël van de Poppe points out that BTC may still retest the $110,000 to $112,000 range. Bitcoin advocate Robert Kiyosaki, on the other hand, leans towards a short-term bearish outlook, but does not rule out the opportunity to buy on dips.

Conclusion

At the end of July, Bitcoin experienced a big dump, primarily due to profit-taking at high levels and outflows of ETF funds, compounded by macro policies that failed to provide timely support. After short-term fluctuations, the market's long and short positions have become increasingly divergent. Whether BTC can return to its peak remains to be seen, depending on capital momentum and policy changes. Investors should closely monitor ETF flows, institutional dynamics, and technical support levels to seize market turning points.