Bitcoin spot exchange-traded funds (ETFs) halted net outflows that had run for 10 straight trading days, but the recovery in inflows still appears weak.

On July 9, local time, Cointelegraph reported that Bitcoin spot ETFs posted more than $500 million in net inflows over three trading sessions, then swung back to net outflows of $84.9 million on Wednesday.

The move followed large-scale withdrawals that began on June 17. Data compiled by investment firm Farside Investors showed Bitcoin spot ETFs recorded net outflows for 10 consecutive trading days, with total withdrawals of $2.7 billion over that period. Some funds later returned, suggesting selling pressure was easing, but the renewed net outflow after just one day left questions about the strength of the recovery.

In a post on X, formerly Twitter, Swissblock assessed the ETF flow by saying, "The storm has passed. The most overwhelming ETF distribution wave of this bear market has ended."

Swissblock did not view the current phase only optimistically. The company said, "ETF accumulation is positive, but not strong," adding, "Institutional conviction has not fully returned."

Some also pointed to the quality of demand rather than the direction of flows as the key. Markets continue to cite overall weak demand as an obstacle to a recovery in Bitcoin's strength. In a report this week, CryptoQuant analyst IT Tech noted that cumulative demand over the past 30 days recovered to about minus 75,000 BTC from about minus 500,000 BTC a week earlier.

The gap in sentiment between the spot and derivatives markets persisted. IT Tech explained that futures demand turned slightly positive from minus 295,000 BTC, but said spot demand remained negative. He said, "The recent rebound was led mainly by derivatives traders, and spot buyers remain relatively cautious."

That suggests it is too early to say the broader market's buying base has fully revived even if ETF flows improve in the short term. In particular, spot ETFs have been seen as an indicator of institutional risk appetite, and the return to net outflows after three trading days of net inflows is read as meaning the recovery remains unstable.

The move also shows that, even if ETF selling pressure may have passed its peak, it is hard to be definitive about the durability of a Bitcoin rebound until a recovery in spot demand is confirmed. Market participants are watching whether ETF inflows resume and whether a derivatives-led rebound leads to broader spot buying.

The storm has passed: The most overwhelming ETF distribution wave of this bear market has ended. As Bitcoin Risk continues easing from Capitulation Risk, Spot ETF flows have turned slightly positive again. But there is one important caveat: ETF accumulation is positive, but… pic.twitter.com/RXlDQDII6E