Bitcoin Faces Possible Further Decline Amid Liquidity Issues and Mixed Institutional Demand

• Liquidity inventory hit historic lows, signaling market instability.

• ETF inflows fluctuated, reducing institutional support and contributing to price volatility.

• Bitcoin trading volume rose 13.63% amid a 3.92% weekly price decline, with expert predictions of further drops.

Bitcoin price falls nearly $9,000 after July 2025 ATH due to liquidity issues and weak demand. Stay informed with COINOTAG’s expert crypto analysis.

What Caused Bitcoin’s Sharp Price Decline After the July 2025 ATH?

Bitcoin’s price drop after hitting $123,091 was primarily caused by a collapse in liquidity inventory combined with weak demand. Despite a historically low supply of BTC available for sale, buyers including ETFs and large investors pulled back, creating an imbalance that led to the nearly $9,000 price fall. This unusual market dynamic disrupted typical supply-demand behavior, where low supply usually boosts prices.

How Did ETF Inflows and Institutional Demand Impact Bitcoin’s Price?

ETF inflows in July 2025 were unstable, alternating between surges and sudden drops, which undermined institutional support. This volatility in large-scale buying prevented price stabilization. Large accumulators such as Metaplanet have resumed purchases recently, acquiring 463 BTC on August 4, indicating some renewed confidence but not enough to reverse the overall downward trend.

What Are the Current Market Trends and Expert Predictions for Bitcoin?

Bitcoin’s trading volume increased by 13.63% to $55.96 billion, yet the price declined by 0.22% in the last 24 hours, trading at $114,314.30. Over the past week, BTC has fallen 3.92%, reflecting ongoing market uncertainty. Financial author Robert Kiyosaki predicts further declines, suggesting Bitcoin could drop to $90,000, which he views as a buying opportunity to double his investment.

What Is the Liquidity Inventory Ratio and Why Does It Matter?

The liquidity inventory ratio measures the amount of Bitcoin available for sale relative to demand. In July 2025, this ratio collapsed to historic lows, indicating that while supply was scarce, demand was insufficient to maintain price levels. This imbalance caused the price to fall sharply, defying typical market expectations where low supply usually drives prices up.

How Do Large Investors Influence Bitcoin’s Market Stability?

Large investors and institutional buyers play a crucial role in stabilizing Bitcoin’s price by absorbing supply fluctuations. The withdrawal of ETFs and major buyers in late July weakened this support, leading to increased volatility. However, recent purchases by firms like Metaplanet suggest some institutional confidence is returning, though it remains uncertain if this will halt the downward trend.

Frequently Asked Questions

What caused the liquidity inventory collapse in July 2025?

The collapse was caused by a mismatch of low Bitcoin supply and weak demand, with major buyers like ETFs pulling back, leading to market instability and price decline.

How does Bitcoin’s trading volume affect its price?

Higher trading volume can indicate increased market activity but does not always prevent price drops if demand is weak, as seen in July 2025’s price decline despite a 13.63% volume increase.

Key Takeaways

• Liquidity collapse: Historic low Bitcoin supply combined with weak demand triggered the price drop.
• Institutional impact: Fluctuating ETF inflows and reduced large investor activity increased volatility.
• Market outlook: Despite increased trading volume, Bitcoin’s price declined, with expert forecasts suggesting further drops.

Conclusion

Bitcoin’s near $9,000 price decline after its July 2025 ATH highlights the critical role of liquidity and institutional demand in market stability. While recent large purchases offer some optimism, expert predictions and current data suggest cautious monitoring is essential. COINOTAG will continue providing timely updates to help investors navigate this evolving landscape.