Bitcoin Tests $63k Support as ETF Outflows Clash with Supply Squeeze

Woofun AI reports that Bitcoin price action on July 28 settled near $63,350 after dipping to $63,000, aligning closely with the 50-day simple moving average at $63,275. This positioning reflects the failure to breach the $67,370 resistance level identified in the July 27 analysis, leaving the asset hovering at a critical technical juncture.

The immediate technical landscape hinges on the $63,300–$63,600 support zone; holding this range preserves the recent defense and offers a pathway back above $65,000. Conversely, a confirmed daily close below the moving average would activate bearish momentum, exposing the $62,000 area. The current candle remains open, meaning the breakdown is not yet confirmed despite the proximity to the 50-day SMA.

Woofun AI data shows US spot Bitcoin ETFs recorded net outflows for three consecutive trading days, draining liquidity from the market. The funds lost $225.18 million on July 23, followed by $240.08 million on July 24 and $11.64 million on July 27, bringing combined outflows to approximately $476.9 million. This sequence underscores a reversal from the previous week’s modest net inflow of $33.79 million, indicating that earlier buying strength failed to sustain Bitcoin above $65,000.

Structurally, CryptoQuant highlights a diverging long-term trend where exchange reserves have declined by roughly 78,000 BTC over six months, dropping from 2.783 million to 2.705 million BTC.

This shift toward self-custody reduces readily available sell-side supply, potentially amplifying price responsiveness if demand returns. While short-term holders exhibit weak spot demand, the shrinking liquid supply creates a tighter market environment that may limit downside volatility.