Bitcoin has returned above $65,000 as market sentiment shows signs of recovery after the Spot Bitcoin ETF in the United States recorded a net inflow of $75.7 million last week.
At the time of writing, the price of Bitcoin is at $65,538, down 0.03% since it opened early Tuesday in Asian trading.
The performance marks the second consecutive week that the fund has received new investments from investors.
The recovery is also supported by hopes that negotiations between the United States and Iran could potentially resume.
The easing of geopolitical sentiment has helped boost investor confidence in risky assets, including Bitcoin.
Although the fund's inflows have returned to positive territory, the amount is still small compared to the outflows that occurred previously.
In the past eight weeks, the Spot Bitcoin ETF has seen $8.2 billion in outflows, while the recovery so far has only reached $273.1 million, equivalent to about 3.3% of the total outflows.
June also recorded the largest outflow period in Spot Bitcoin ETF history, with $4.5 billion being withdrawn from the fund.
BlackRock’s iShares Bitcoin Trust (IBIT) accounted for nearly 79% of the outflows.
Total assets held by the entire Spot Bitcoin ETF are now down to around $77 billion, down from more than $104 billion in mid-May.
Bloomberg Intelligence ETF analyst Eric Balchunas believes that Bitcoin’s current movement pattern is similar to that of gold ETFs.
According to him, gold ETFs have experienced large drops after reaching a peak before recovering and recording new highs a few years later.
He sees the potential for Bitcoin to go through a similar cycle of bullish phases, price corrections and gradual recoveries.
However, Citigroup took a more cautious stance when it lowered its 12-month Bitcoin price target from $112,000 to $82,000.
The bank also expects inflows into the Spot Bitcoin ETF to remain weak due to still-slow institutional demand and the development of digital asset regulations in the United States that have not shown significant progress.
At the same time, BlackRock CEO Larry Fink stated that the massive sell-off phase is likely to be over as fund flows return to record an increase.
This development makes the performance of the Spot Bitcoin ETF, the Federal Reserve's (Fed) interest rate policy and geopolitical sentiment among the main factors expected to continue to influence the direction of the Bitcoin price in the near term.
