U.S. spot Bitcoin exchange-traded funds recorded net outflows for a second consecutive day on Friday, ending a seven-day inflow streak, according to data from Farside Investors.

The funds lost $240 million on Friday after shedding $225 million the previous day, bringing the two-day total to $465 million. That erased nearly half of the roughly $1 billion they had attracted during the prior seven-session run. Inflows had reached a peak of $227 million on July 20, the strongest day of the streak, before demand weakened.

BlackRock’s IBIT accounted for just under $415 million of the two-day outflow, making it the main driver of the reversal. Despite the late-week redemptions, U.S. spot Bitcoin ETFs still ended the week with net inflows of almost $34 million, as the outflows only partially offset three earlier strong inflow sessions. Because spot Bitcoin ETFs are widely used as a regulated route for gaining or reducing Bitcoin exposure, their daily creation and redemption data is closely watched as a gauge of institutional demand.

A risk-off week

Tim Sun, Senior Researcher at HashKey, told Decrypt that the sharp turn suggested institutions were making “tactical, phased allocations near the temporary price bottom,” rather than showing conviction buying. He said the pattern reflected “a lack of a solid foundation” for a sustained uptrend.

Sun said IBIT’s outsized role was significant because the fund is large and liquid, making it a common vehicle for institutions seeking to add exposure or hedge positions. Heavy withdrawals from IBIT suggest those investors are “actively reducing their short-term Bitcoin exposure,” he said.

Sun linked the move to deteriorating macro conditions, including renewed U.S.-Iran tensions that have lifted oil prices and inflation expectations, along with bond markets pricing in higher odds of a Federal Reserve rate hike later this year. He added that the pullback was not limited to crypto. U.S. stock funds posted net outflows for a second straight week, while bond funds ended a run of inflows, developments he said pointed to “a broader contraction across asset allocations.”

According to Sun, the data confirms two things: Bitcoin’s rally “lacks a firm foundation,” and capital “remains on high alert” over macroeconomic risk. If expectations for rate hikes continue to rise, he warned, Bitcoin “could face further capital outflows and downside price pressure.”

Bitcoin was trading at $65,300, up 1.9% over the week, according to CoinGecko data cited by Decrypt. On prediction market Myriad, which is owned by Decrypt parent company Dastan, users placed a 37% probability on BTC’s next move taking it to $84,000, up from lows of 20% at the start of the month.

Grayscale head of research Zach Pandl argued in a note last week that Bitcoin’s bottom “may already be in” if the Fed refrains from further rate hikes. He dismissed the “four-year cycle” theory that points to a deeper low in September or October. The Fed’s next rate decision is scheduled for July 29, a near-term test of that view, with the CME FedWatch tool placing a 34% probability on a 25-basis-point rate hike. The rate decision is a key macro marker for crypto traders because higher rates can make cash and fixed-income assets more attractive relative to risk assets.

Waiting for a rebound

Stephen Wundke, strategy and revenue director at Algoz Technologies, also said the trend “reversed last week” as President Trump signaled renewed action against Iran and Houthi attacks near the Red Sea pushed oil back above $100. Those developments revived concerns about inflation and interest rates and prompted investors to move back into cash, he said.

Wundke was more constructive about what may follow. He said most investors see current prices as “near the bottom of the cycle,” adding that “the overall feeling is one of optimism.” With a pause in U.S.-Iran strikes extending into a third day, he said that if the fighting were to “fizzle out,” oil could stabilize near $80, inflation fears could ease, and ETF inflows and prices could begin rising steadily again.

August is typically a “dull month for crypto,” Wundke cautioned, so investors should not “expect fireworks yet.” Still, he argued that the industry is building toward a year-end push, ideally supported by a negotiated peace in the Middle East.