Bitcoin rally strengthens on easing ETF outflows

The benchmark digital currency is fighting to find solid ground just above the $63,000 level after last week’s major sell-off had driven Bitcoin down as low as $58,000. Cooling inflation and a sudden halt in institutional liquidations offer new fuel for crypto’s attempted recovery. The easing of Federal Reserve interest rate hike fears provided major tailwinds to the asset.

Last Tuesday the leading digital currency snapped a 10-day long run of outflows that the leading digital currency endured since June 17, as U.S.

Spot Bitcoin ETFs saw inflows for the first time since then totaling more than $200 million. “Given the better-than-expected US CPI reading and Non-Farm Payroll report for the past two months, concerns about continued interest rate hikes by the Federal Reserve has eased up, prompting a recovery across the broader financial market,” said the market analysis team from CryptoQuant.

“This sentiment may have continued to affect institutional investment vehicles for Spot Bitcoin ETFs,” they added. A return to positive institutional inflows was not sufficient to maintain upward momentum as institutional redemptions came roaring back into play, sending outflows over $450 million through Thursday, according to ETMP data.

So far this week’s outflows stand at nearly $550 million – that represents the second-highest weekly total outflows to date, with inflows on Tuesday barely managing to make a dent on broader selling pressure.

The BlackRock divergence The latest ETF data further revealed a significant divergence in institutional behavior with the largest U.S. Spot bitcoin ETF from BlackRock iShares’ Bitcoin Trust(IBIT) seeing continuous daily outflows for 11-straight days. Meanwhile, rival products from Fidelity, Grayscale and Ark Invest reported net daily inflows during last Tuesday’s halt in institutional outflows. Spot Bitcoin ETF outflows continue despite Bitcoin bouncing above key support.

BlackRock iShares’ ETF (IBIT) has now suffered redemptions every day since it was listed except for its inaugural day as its largest U.S.-based spot Bitcoin exchange-traded fund has failed to stop shedding investors despite a flurry of inflows from its rivals last week, suggesting a rotation within the institutional flows of funds rather than a broad return of the whales in general.

Bitcoin (BTC) technicals Bitcoin bounced and successfully closed above its 200-week Simple Moving Average (SMA), at $62,867. A break above the 200-week SMA could suggest a short to medium-term upside potential as market bulls now try to push past the resistance level at $64,000.

“For the week, the benchmark cryptocurrency traded slightly below our target for the $62,800-$63,000 area as expected last week,” added researchers from Fxpro.

“Given the weakness that came out this morning from its global rivals like the US Spot Bitcoin ETFS as total net weekly redemptions crossed the $500M barrier, its upside seems capped for the current week,” they noted. However, if Bitcoin breaks above $64,000, it may then set the stage for the next bullish move towards the $65,000 – $65,744 levels.

If the market continues to fail at this level and instead pulls back below $62,800, it may test its previous consolidation level at around the $58,000 range which, in most cases, would signal a significant pullback in the short to medium term. Given July is typically a very bullish month, there remains optimism that these potential inflows are likely to continue and may even accelerate over the next several weeks.

July 5, 2024 Bitcoin’s rebound shows signs of faltering after major institutional selling as ETF outflows remain robust and a key product continues to shed assets, raising concerns about the sustainability of current market gains.

The price of the flagship digital currency, Bitcoin (BTC), is facing strong resistance just above the $63,000 mark. This struggle comes as outflows from U.S. Spot Bitcoin ETFs, which recently saw a brief period of net inflows, are once again ramping up, signaling continued hesitation from institutional investors. Investors had momentarily cheered a halt to a prolonged streak of selling, with U.S. Spot Bitcoin ETFs experiencing a net inflow of over $200 million on Tuesday.

This pause in outflows, following a series of daily redemptions that stretched back over 10 days, was attributed to more favorable U.S. Inflation data and the subsequent softening of Federal Reserve rate hike expectations. Macroeconomic tailwinds that had lifted risk assets across the board appeared to extend to the crypto market, injecting a degree of optimism. However, the reprieve proved to be short-lived.

Bitcoin steady above $63K, ether keeps Crypto strong

Total net outflows from U.S. Spot Bitcoin ETFs for the week ended July 4th surpassed $526 million, marking the eighth consecutive week of net outflows, according to data compiled by ETMP.