Bitcoin fell sharply to $63,362 on July 28, marking a 2.97% decline over the past 24 hours, as a sudden reversal in U.S. spot ETF flows and pre-FOMC uncertainty rattled crypto markets. The flagship cryptocurrency has shed over $2,300 from its weekend high of $65,665, dragging the broader digital asset market into the red.
The most significant catalyst behind the selloff is the dramatic reversal in U.S. spot Bitcoin ETF flows. Data shows that between July 23 and 24, Bitcoin ETFs recorded more than $465 million in net outflows — a stark reversal from weeks of consistent inflows. BlackRock’s IBIT fund, the largest spot Bitcoin ETF by assets under management, accounted for approximately $415 million of the total outflow. As of July 24, IBIT held $47.41 billion in net assets with a closing price of $36.35 per share.
This outflow streak caught many institutional observers off guard. Throughout July, Bitcoin ETFs had posted consistent weekly net inflows ranging from $33 million to $197.4 million, reflecting growing institutional conviction. The sudden reversal suggests that large investors are reducing risk exposure ahead of the Federal Reserve’s July 28-29 FOMC meeting — a pattern also visible in equity markets, where the S&P 500 and Nasdaq fell 1.21% and 2.15% respectively last week.
Derivatives markets paint an equally cautious picture. Approximately $90 million in Bitcoin futures positions were liquidated in the past 24 hours, with 81.4% coming from long positions. This indicates that many traders were caught offside as Bitcoin reversed from its attempt to break above $66,000. Open interest declined by 2.68%, and funding rates have normalized to 0.0040%, suggesting a balanced but cautious market posture.
The Crypto Fear & Greed Index, a widely-followed sentiment gauge, has fallen to 29 — firmly in “Fear” territory and down significantly from readings near 40 just a week ago. This rapid deterioration in sentiment reflects both the ETF outflow shock and broader macro uncertainty surrounding the Federal Reserve’s policy trajectory.
On the regulatory front, the CLARITY Act — a long-awaited crypto market structure bill — continues to work its way through Congress. The legislation aims to establish a comprehensive regulatory framework for digital assets in the United States. Meanwhile, Japan’s historic decision to reclassify cryptocurrencies as financial assets and slash the tax rate from 55% to 20% provides a significant tailwind for the Asian crypto market, though this structural positive has yet to offset near-term selling pressure.
Looking ahead, the Fed’s FOMC decision on July 29 is the pivotal event for crypto markets this week. Markets currently price in a near-certain hold on rates, but the tone of the post-meeting statement and press conference will be critical. If Chair Powell signals openness to a September rate cut, Bitcoin could quickly recover toward $65,000-$68,000. Conversely, a hawkish hold emphasizing persistent inflation risks could push Bitcoin below the psychological $60,000 level. With open interest declining and sentiment at fear levels, the market appears to be in a “wait and see” mode ahead of the Fed decision.