Bitcoin loses almost 4% amid ETF demand concerns 📊

The largest cryptocurrency, Bitcoin continues its decline, after ETFs saw a net outflow of nearly $2 billion over the past few days. Tuesday's rebound was quickly erased and the price has now fallen below $63,000.

• Some market observers indicate that the reason for the declines is the sale of shares in Grayscale by the bankrupt Genesis platform, which already received approval to convert $1.3 billion worth of shares in February. The biggest selling of course come from GBTC, where we could see as much as $1.8 billion outflows in last few days;
• Attention will shift to BlackRock and Fidelity ETFs, where investor activity is declining (despite BlackRock yesterday higher inflow). Potential selling from these two funds could put pressure on Bitcoin.
• The U.S. dollar is trading up sharply today, further negatively impacting cryptocurrency market momentum. Altcoins like Dogecoin and Cardano are losing almost 5% today, while the second largest cryptocurrency Ethereum is testing the area around $3300 and losing 4.5%.

Source: XTB Research, Bloomberg Finance LP

Bitcoin charts (H1, D1)

On the lower interval, we can see that the price of BTC is slipping coming out the bottom of a formation, resembling a head-and-shoulders (RGR). A drop below $61,000 could potentially trigger a cascading sell-off, in an extreme case wiping out almost completely the upward movement that has been going on since January. The RSI indicator on D1, near 50 points, indicates that there is still room for further cooling. At the same time, bitcoin likes to surprise investors, and the fundamentals for further growth this year seem undisturbed. Sentiment is negatively impacted by ongoing outflows from ETFs for the 4th consecutive day, where Grayscale (GBTC) continues to lead the way.

However, it is worth noting that inflows into the remaining 9 ETFs are at record lows, indicating a potential exhaustion of demand at this stage of the rally. Key on-chain levels are around $50,000 where the average of ETF investor purchases is located. The purchase price of BTC by long-term investors also runs close to this level. This one has provided significant bull market momentum support in previous cycles. For such a deep decline probably a significant correction on Wall Street would likely be needed, as at $60,000 Bitcoin will see a more than 20% correction, i.e. one of the deeper ones since the 2022 rebound.
Source: xStation5
Source: xStation5