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Bitcoin Boredom Will Continue Until ETF Withdrawals Improve

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U.S. spot Bitcoin ETFs have witnessed net outflows of almost $300 million in the past two days.

The Bitcoin price has successfully reclaimed the $65,000 mark after it sank down towards $64,000 yesterday. The leading cryptocurrency is seemingly range bound between $65,500 and $64,000, according to analysts.

Bitcoin’s short-term price movement will thus likely remain muted in the absence of any key catalysts. And the worrying trend of institutional investors selling their Bitcoin ETF shares from last week still persists.

In the past two days, U.S. spot Bitcoin ETFs saw net outflows of $298 million, according to data analytics platform SoSovalue. Since the beginning of last week, June 10, Bitcoin funds in the states have seen net outflows of $879 million.

Yesterday Fidelity’s FBTC fund saw the highest outflow of $175 million, while Grayscale Investments’ GBTC fund witnessed an outflow of $65 million.

Last week, institutional investors took out $621 million from Bitcoin ETFs after the Federal Reserve’s stance turned out to be more hawkish than what market participants had anticipated.

Meanwhile, Bitcoin derivatives traders have lost $32 million to liquidations in the past 24 hours, with long liquidations accounting for $20 million, according to derivatives analytics platform Coinglass.

The relentless net outflows have damped investors’ confidence as Bitcoin has dropped by 6% in the past 7 days, according to CoinGecko.

A BRN trading desk note shared with Decrypt indicated that Bitcoin could potentially witness a trend reversal if ETFs’ inflows exceeded outflows.

The note went on to state that Trump’s pro-mining stance could benefit miners massively in the coming months. The mining sector, as a whole, is undergoing drastic changes as miners with old hardware are being phased out while new energy-efficient miners are taking their place.

“Mining stocks outperformed Bitcoin last week, spurred by Trump’s announcement of his intent to make the U.S. a mining powerhouse. Bitfarms led the charge with a 34% increase, followed by CleanSpark with a 19% gain. Over the past week, we observed a decrease in miners’ reserves, along with declines in HashPrice (rewards for computing power) and Hashrate (computing power),” Valentin Fournier, an analyst at digital asset research firm BRN, noted. “This trend suggests that mining power is diminishing as older mining devices become unprofitable and are repurposed for other uses, such as AI.”

Notably, miners have been depleting their Bitcoin holdings to fund their operations or to upgrade their hardware.

Investors still need to err on the side of caution, Fournier said, adding that if Bitcoin drops below the $64,000 mark, it could potentially trigger an early bear market.

“Overnight, Bitcoin’s price dropped to the short-term holder realized price (STHRP) of $64,000, a significant support level,” he wrote. “It rebounded to $65,500, but a sustained dip below STHRP could trigger a larger correction and potentially mark the beginning of an early bear market. While we believe Bitcoin is still consolidating towards higher levels, the need for a catalyst is becoming increasingly urgent as the extended selling pressure persists.”

Edited by Stacy Elliott.

Read More: Bitcoin Boredom Will Continue Until ETF Withdrawals Improve

2024-06-19 16:25:33

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