Bitcoin struggled to gain significant momentum on Friday, trading at $63,125, despite the market benefiting from robust spot ETF inflows earlier in the week. The cryptocurrency’s inability to break higher coincided with heightened volatility across the digital asset sector, where over 94,000 traders faced liquidations totaling $359.33 million in the past 24 hours, according to data from Coinglass. This surge in forced exits highlights the fragile sentiment among leveraged positions even as institutional interest remains strong.

The broader crypto market reflected this cautious stance, with major altcoins posting modest declines. Ethereum traded at $1,870, while XRP settled at $1.06 and Dogecoin at $0.06999. Solana held at $73.29, and Shiba Inu was priced at $0.000004744. These price movements occurred against a backdrop of strong institutional inflows, with SoSoValue reporting net inflows of $233.1 million into spot Bitcoin ETFs on Thursday alone. Spot Ethereum ETFs also saw positive activity, recording net inflows of $13.3 million during the same period.

Market Structure and Analyst Views

Technical analysts suggest that Bitcoin’s broader market structure is weakening. CryptosBatman noted that the asset continues to form lower highs while testing a key trendline support level. A confirmed breakdown below this support could potentially trigger a move toward the $58,000 level. Meanwhile, Michael van de Poppe described the current retracement as a normal range-bound move, often seen on the last trading day of the month. He advised investors to accumulate during weakness and avoid overreacting to short-term volatility, viewing the pullback as a healthy correction within a stronger trend.

Post-FOMC Trends and Liquidations

Historical patterns following Federal Reserve meetings appear to be influencing current price action. Trader KillaXBT observed that Bitcoin has fallen 2.8% since the recent FOMC meeting, aligning with typical post-meeting weakness. Data indicates that six of the last seven FOMC events resulted in average declines of 4%–5%. Based on this trend, the analyst expects a possible retest of the $60,000–$61,000 range, warning that a break below $60,000 could lead to a sweep of recent lows.

What the Numbers Show

The divergence between strong institutional inflows and retail trader liquidations underscores a shift in market dynamics. While $233.1 million flowed into spot Bitcoin ETFs, signaling continued institutional confidence, the liquidation of $359.33 million in trader positions suggests that leveraged retail exposure remains vulnerable to short-term fluctuations. This pattern indicates that while long-term holders and institutions are accumulating, short-term speculators are being flushed out, potentially reducing immediate selling pressure from over-leveraged accounts once the volatility subsides.

Bridgewater Associates founder Ray Dalio has disclosed that he allocates approximately 1% of his investment portfolio to Bitcoin, viewing the cryptocurrency as a form of "hard money" that cannot be printed by governments. Despite this exposure, Dalio stated on July 30 during an interview on the "Diary of a CEO" podcast that he continues to prefer physical gold bars for preserving purchasing power over the long term, citing significant technological and regulatory risks associated with digital assets.

Dalio categorized Bitcoin alongside other forms of hard money designed to protect investors against the depreciation of government-issued currencies. He recommended that investors generally consider holding between 5% and 15% of their portfolios in such assets, depending on individual circumstances. Within this specific allocation range, Dalio explicitly favored gold, noting its historical resilience and lack of counterparty liability compared to digital alternatives.

Risks Associated with Bitcoin

Dalio highlighted several vulnerabilities inherent to Bitcoin that make it less attractive than gold for conservative wealth preservation. He pointed to potential threats from emerging technologies, specifically quantum computing, which could compromise the security of blockchain networks in the future. Additionally, he emphasized that Bitcoin transactions are not truly private, as they can be monitored, taxed, or restricted by governments.

"It’s a type of money that can’t be printed, but there are technologies that can hurt it," Dalio said. He argued that because governments hold the power to regulate financial systems, they can effectively restrict or control Bitcoin usage if they choose to do so, undermining its status as a decentralized store of value.

Gold’s Resilience and Central Bank Dynamics

In contrast to Bitcoin, Dalio praised gold for its ability to remain outside the reach of foreign governments and financial sanctions, particularly during periods of geopolitical instability. He noted that recent global conflicts have reinforced the perception among investors and nations that assets must be difficult to confiscate or control by third parties. Gold, being a physical asset that cannot be created through monetary policy, meets these criteria more robustly than digital currencies.

Dalio also predicted that central banks are unlikely to embrace Bitcoin as a reserve asset. He argued that governments generally prefer to maintain control over financial transactions and privacy, making the transparent and decentralized nature of Bitcoin unappealing for official reserves. "Central banks will not own any significant amount of that," he stated, reinforcing his view that gold remains the dominant asset for sovereign and institutional wealth preservation.

What the Numbers Show

Dalio’s portfolio allocation reveals a cautious approach to digital assets. By limiting Bitcoin exposure to just 1%, while advocating for a broader 5%–15% range for hard money generally, Dalio signals that he views Bitcoin as a speculative hedge rather than a core holding. The disparity between his recommended total allocation for hard money and his actual Bitcoin holding underscores his preference for traditional assets like gold, which he perceives as having fewer existential risks from technological disruption or regulatory crackdowns.