Bitcoin Retreats Below $64,000 as ETF Selling Returns and Crypto Policy Hits a Roadblock

Bitcoin has lost ground at the start of the week as several previously supportive market narratives have weakened at the same time.

BTC was trading around $63,906 on August 11, after failing to establish a sustained position above $65,000. Ethereum was near $1,871, while XRP traded around $1.00. The decline followed the end of a five session run of US spot Bitcoin ETF inflows and renewed uncertainty around the progress of the CLARITY Act.

At the same time, the Coldcard security incident continues to expand. Researchers have identified more affected Bitcoin addresses than were known when the incident first emerged, with confirmed losses exceeding $100 million and broader estimates still developing.

The market is therefore facing a test of whether buyers can absorb weaker ETF flows, regulatory uncertainty and renewed custody concerns.

Key Takeaways

Bitcoin Loses Momentum as ETF Buying Reverses

The clearest change from last week is visible in Bitcoin ETF flows.

US spot Bitcoin ETFs attracted approximately $853.5 million through August 7, strengthening the argument that Bitcoin's move toward $65,000 was supported by institutional demand. That momentum changed on August 10, when the group recorded approximately $144.6 million in net outflows.

The reversal does not prove institutional investors have turned bearish. It does, however, make the next several trading sessions more important because the market needs to determine whether other sources of demand can absorb selling pressure.

One negative session does not erase the bigger picture

ETF flows can reflect portfolio rebalancing, profit taking and changes in exposure. A return to inflows would make Monday's reversal look temporary.

If outflows continue for several sessions, however, the August inflow surge may increasingly look like a short term allocation event rather than the beginning of a sustained accumulation cycle.

The CLARITY Act Has Become a New Source of Market Uncertainty

Crypto regulation has also shifted from a potential catalyst to a source of uncertainty.

The US Senate entered its August recess without completing a floor vote on the CLARITY Act. Senate Majority Leader John Thune has filed a cloture motion for September 15, but the legislation still faces unresolved political and policy disagreements.

Prediction market expectations have fallen sharply. Polymarket odds had reached approximately 82% in February, while recent pricing has placed the probability of passage in 2026 around the mid teens.

Why the delay matters

The CLARITY Act could provide greater clarity around the classification and regulation of digital assets in the United States.

That matters to exchanges, asset managers, financial institutions and infrastructure providers because regulatory certainty can influence product launches, compliance systems and investment decisions.

The August delay does not mean the legislation is dead. Senators are expected to return in September, leaving room for further negotiations. However, the timetable is now much tighter.

Prediction markets are signals, not guarantees

The approximately 16% probability should not be treated as a definitive forecast.

Prediction market prices reflect participant expectations at a particular point in time and can change quickly when negotiations or political developments shift.

The more important signal is the change in expectations. Earlier optimism has given way to a much more cautious view of whether the bill can become law before the end of 2026.

Coldcard Losses Continue to Expand

The Coldcard incident has become one of Bitcoin's most significant recent custody stories.

The incident involves a firmware vulnerability affecting seed generation on certain Coldcard devices. It did not compromise Bitcoin's blockchain. Instead, it created a weakness in the process used to generate private wallet seeds.

Galaxy Research has reported confirmed losses exceeding $100 million, while broader investigations have identified additional suspected activity. Earlier estimates were closer to $38 million, showing how the reported scope has expanded.

Why the vulnerability is different from a Bitcoin network attack

Hardware wallets are designed to keep private keys away from internet connected systems. However, that protection depends on the integrity of the entire key generation process.

If a seed is generated with insufficient randomness, an attacker may be able to reproduce likely seeds without physically accessing the device.

The incident therefore does not indicate a failure of Bitcoin's consensus or blockchain security. It demonstrates that weaknesses in wallet implementation can create serious risks even while the underlying network operates normally.

The scale is still being investigated

Galaxy's analysis separates confirmed activity from suspected additional activity.

The confirmed figure has exceeded $100 million, while broader estimates have moved toward approximately $116 million to $130 million, depending on which suspected transactions are included.

These figures should therefore be treated as evolving estimates rather than a final loss total.

What affected users should do

Coinkite has issued firmware updates and security guidance for affected users. Updating firmware does not repair a seed that was already generated under vulnerable conditions.

Users who believe they may have an affected wallet should follow the manufacturer's latest guidance and move funds to a newly generated wallet where appropriate.

The incident reinforces an important self custody lesson. Keeping assets offline can reduce certain risks, but it does not eliminate risks involving firmware, seed generation, backups or user procedures.

Bitcoin Is Back at the Center of a Technical Test

The move below $64,000 places Bitcoin back in a technically important area.

BTC repeatedly tested the $65,000 to $65,500 region without establishing a sustained breakout. Buyers now need to demonstrate that the $63,000 to $64,000 area can attract sufficient demand.

These levels are areas of market interest rather than guaranteed turning points.

A recovery above $65,000 would return attention to the recent ETF driven rally. A sustained move below $63,000 would suggest sellers are gaining greater control of the short term structure.

Ethereum and XRP Show How Quickly Market Breadth Can Change

Ethereum was trading around $1,871, while XRP was near $1.00 as Bitcoin weakened.

Ethereum has a distinct market narrative because its network supports stablecoins, decentralized applications and tokenized assets. Ethereum vs. Bitcoin: A Complete Comparison Guide provides additional context on the differences between the two assets.

XRP remains particularly sensitive to regulatory developments, making the CLARITY Act debate relevant beyond Bitcoin and Ethereum.

If Bitcoin stabilizes while ETH and other major assets recover, market breadth would improve. If Bitcoin remains weak while altcoins underperform, the market would continue to reflect selective rather than broad risk appetite.

The Next Test Comes From US Inflation

The next major macro event is the July Consumer Price Index report.

The US Bureau of Labor Statistics has scheduled the release for August 12 at 8:30 AM Eastern Time. June consumer inflation was 3.5% year over year, while core inflation was 2.6%.

The report matters because markets are already reassessing Federal Reserve expectations after weaker employment data.

CME FedWatch tracks rate expectations using 30 Day Federal Funds futures. A softer CPI reading could reinforce expectations for less restrictive policy, while a stronger result could reverse some of that optimism.

What Traders Should Watch Next

ETF flows

The first question is whether Monday's $144.6 million outflow remains isolated. A return to consistent inflows would strengthen the case that institutional demand remains intact. Continued outflows would make the recent loss of momentum more significant.

Bitcoin at $64,000

The $63,000 to $64,000 region is now important for short term market structure. A recovery from this area would suggest buyers remain active. A decisive break lower would shift attention toward the $62,000 region.

CLARITY Act negotiations

The Senate's September return creates another potential catalyst. The legislation is not irrelevant simply because the August timetable failed. However, the market has moved from expecting near term progress to waiting for evidence that lawmakers can resolve the remaining disagreements.

Coldcard developments

The security investigation remains active. New wallet addresses, transaction clusters and confirmed victims could continue changing the estimated scale of losses. Users should rely on official security information rather than social media speculation.

The incident also reinforces an important self custody lesson. Keeping assets offline can reduce certain risks, but it does not eliminate risks involving firmware, seed generation, backups or user procedures. Readers who want to understand the fundamentals of crypto custody can also explore What Is a Crypto Wallet? A Beginner's Guide.

Want to track the market more closely? Explore TradeMesa's Crypto Trading Signals for actionable market setups, technical levels and trading opportunities.

Market Outlook

Bitcoin's move below $64,000 changes the tone of the August recovery.

Last week's strong ETF inflows provided a clear source of demand, but Monday's $144.6 million outflow shows that institutional flows can reverse quickly. The CLARITY Act has also lost much of the optimism surrounding it earlier in the year, while the expanding Coldcard incident has added another layer of custody risk.

The market is now facing three central questions.

• Can ETF demand return?

• Can Bitcoin defend the $63,000 to $64,000 area?

• Can US inflation remain supportive enough to prevent financial conditions from becoming more restrictive?

The answers will determine whether the current decline becomes another short term correction or a deeper reset.

For now, Bitcoin remains above the critical $62,000 area, but the market has lost the clean bullish narrative it had at the start of the week.

This article covers market conditions as of publication time and does not constitute financial advice. Crypto markets are highly volatile. Full Risk Disclaimer →