Bitcoin ETF Pullback Triggers Slump Below $63,000

Bitcoin's recent rally has lost steam as investors pull back from US spot exchange-traded funds (ETFs). The world's largest cryptocurrency dropped below $63,000 on Friday, extending a period of lackluster trading. This comes after ETFs recorded their first two-day stretch of net withdrawals in August, reversing some of the optimism generated by strong inflows at the beginning of the month.

The change in ETF flows is significant as these funds have become an important gauge of institutional appetite for Bitcoin. US spot Bitcoin ETFs saw about $61 million in net withdrawals on Aug 12, with funds operated by Fidelity and BlackRock among those seeing money leave. This follows a stronger start to August when the funds attracted around $754 million without recording a single day of net outflows.

The latest data shows that traders were preparing for a pullback even before the decline. Options activity last week showed investors increasingly buying protection around the $62,000 and $63,000 levels. Put options accounted for nearly 54% of Bitcoin options trading volume over a 24-hour period, with several heavily traded contracts being puts around those strike prices.