Last week saw a total outflow of $6.5 million from crypto funds, marking a reversal in trend after four weeks of heavy inflows. However, this is still minor compared to the $742 million of inflows from the previous four weeks, indicating continued interest in the space. Bitcoin remains the primary focus for institutional investors, but a recent report suggests that they may be cooling off their interest in the cryptocurrency.

Bitcoin remained steady on Tuesday, hovering just above $29,000, while data suggests that long-term holders are moving their coins to cold storage. The cryptocurrency has been trading within a narrow range between $29,000 and $31,500 for over a month. Bitfinex reported that exchange balances have declined significantly, indicating renewed interest in Bitcoin from traditional fund investors.

Data indicates that the Bitcoin Coinbase Premium Gap has turned negative, indicating that large US-based investors may be selling the cryptocurrency. The Coinbase Premium Gap is an indicator of interest from US investors in Bitcoin, measuring the difference between the Bitcoin price listed on Coinbase and that on Binance.

Bitcoin traders are currently undecided about whether to go bullish or bearish, as the cryptocurrency's price has remained in a narrow range between $29,000 and $30,200 for the past few weeks. However, Santiment's analysis shows that the number of bullish calls outweighs those calling for a price top, indicating that traders are more likely to camp on the bullish side. Additionally, Bitcoin's social dominance is at a healthy level, with the percentage of trader discussions related to Bitcoin still above the healthy zone of discussion rate. The liquidity flow into the market has been relatively modest, with the Open Interest hovering around the same area for a while.

According to Bitfinex's latest weekly report, the amount of Bitcoin held on centralized exchanges has dropped to levels not seen since early 2018. The report found that Bitcoin balances on exchanges have decreased by 32% from their peak in March 2020 to 2.1 million BTC. Bitfinex attributes this decline to the growing usage of decentralized exchanges and investors moving their coins to cold storage.

A&G, the leading private bank in Spain, has launched a crypto investment fund, becoming the first of its kind in the country. The fund will have exposure to Bitcoin and Ethereum, as well as a minority exposure to other cryptocurrencies with satisfactory levels of volume and liquidity. A&G stated that investors had expressed great interest in crypto investment and that the fund will be regulated and involve professionals subject to supervision, making it a safer choice for crypto-keen investors. However, the fund involves high levels of risk due to the extreme volatility, complexity, lack of transparency, custody, and concentration risk of cryptocurrencies, which may lead to the total loss of investment.

Altcoins have dominated the market in July 2023, with Ripple's victory over the SEC lawsuit and Bitcoin consolidating. Bitcoin's transaction volume dominance decreased by 8% in July, while altcoins like Dogecoin have gained popularity. Bitcoin's dominance across all top 25 centralized exchanges is at its lowest level since April 2023, and offshore exchanges have seen a decline in BTC trading activity due to a surge in altcoin trading volume in South Korea. Altcoin liquidity has also slightly increased since the beginning of July, with the 1% market depth for the top 10 altcoins by market cap growing by around $20 million. Dogecoin has seen a surge in trading volume and price, becoming the seventh-largest cryptocurrency by market cap.

Deribit's Bitcoin volatility index, used as a measure of crypto fear, has reached its lowest level in two years, indicating a possible lack of price turbulence for Bitcoin in the near future. The volatility index for both Bitcoin and Ether has fallen to a multi-year low of 37%, with the current implied volatility level at the lowest level in crypto's history. The continued low liquidity has severely depressed implied volatility levels for Bitcoin, suggesting that derivatives traders are not confident that there will be any major moves in crypto markets in the short term. Other analysts using different metrics have echoed the sentiment, with Bitcoin's weekly Bollinger Bands contracting to record levels.

Investment products related to Bitcoin have experienced outflows for the first time since June, when Blackrock filed for a spot Bitcoin ETF, according to a report by CoinShares. Outflows of $13 million were recorded for the week ending July 21, reversing five weeks of inflows. Short Bitcoin products also saw outflows of $5.5 million in the week. Ethereum and XRP investment products, on the other hand, recorded a combined inflow of $9.2 million over the last week, with Ethereum being the best performer. Despite this, Bitcoin remains the dominant digital asset investment product, with $558 million in inflows so far in 2023 and a total of $25.0 billion in assets under management.

Data from on-chain analytics firm Glassnode reveals that 5.9% of the total Bitcoin supply has entered into losses as the cryptocurrency's price dropped to $29,200. The "percent supply in profit" indicator has declined to 70.4%, indicating the percentage of the total Bitcoin supply currently carrying some profit. Whenever the profit in supply has crossed the 75% mark, declines in the price have become more probable. The latest tumble in the asset may have come because investors who had been sitting on profits may have sold their coins to harvest their gains.