Bitcoin‘s attempt to reclaim its position above $70,000 has been met with challenges, prompting scrutiny into the underlying reasons behind this setback. Recent data on liquidations, ETF inflows, and market dynamics shed light on the contributing factors.
Firstly, analysis of liquidation heatmap data reveals significant sell-offs clustered around key price levels such as $72,000, $69,000, and $66,000. These liquidations, characterized by forced closures of leveraged positions, exerted considerable selling pressure, precipitating swift and steep declines in Bitcoin’s price.
Secondly, a notable shift in sentiment is evident in the departure from U.S. ETFs tracking Bitcoin. After 19 consecutive days of inflows, these ETFs experienced a net outflow of $64.93 million on Monday. This trend signifies a transition from accumulation to profit-taking or reduced risk exposure among investors.
Specifically, Grayscale’s GBTC witnessed the largest outflow of $40 million, followed by Invesco Galaxy Digital’s BTCO, Valkyrie’s Bitcoin ETF, and Fidelity’s FBTC. While the magnitude of outflows may appear modest, it reflects diminishing institutional interest in Bitcoin, despite previous net inflows totaling over $4 billion during a 19-day streak since January.
Thirdly, market dynamics indicate a waning enthusiasm among participants. Although recent outflows signal a shift, the cumulative net inflow for spot Bitcoin ETFs since January stands at $15 billion, attesting to sustained institutional engagement.
However, a discernible negative trend has emerged, punctuated by profit-taking actions following a prolonged period of positive inflows. Notably, Bitwise’s BITB and BlackRock’s IBIT are among the few funds to record net inflows, amounting to $6 million and $8 million, respectively.
This shift in sentiment suggests a broader adjustment in investor behavior, extending beyond institutional circles, as market participants navigate evolving dynamics in the Bitcoin ecosystem.
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