Bitcoin ETFs Lose $649 Million in One Day as ‘Long-Term Bitcoin Holders Limit Downside Potential’

Spot Bitcoin ETFs took a hit, shedding another $648.64 million on Monday after last week’s loss. $1 billion outflowsAccording to SoSoValue.

BlackRock’s IBIT led outflows on Monday with $448 million. It was followed by outflows from ARK Invest and 21Shares of $110 million, and outflows from Fidelity of $63 million.

Bitcoin It fell 6.7% from $81,700 last Thursday to a weekly low of $76,201, according to CoinGecko data. It is down 0.7% over the past 24 hours and is currently trading at around $76,680.

said Agni Ling, Board Advisor at blockchain financial infrastructure company Wefi Decryption The outflows “are linked to the general market and reflect the de-risking strategy followed by fund managers in light of geopolitical events,” amid the recent escalation in the US-Iran conflict.

While Ling hinted at the impact of the geopolitical situation, Ilya Utyshchenko, chief analyst at CEX.IO, noted that the outflows were “driven by last week’s US inflation data, which significantly shifted market expectations around Fed policy, with expectations of a rate hike this year rising.”

on Countlesshis prediction market DecryptionParent company Dastan, users just put 2% chance The Fed should cut interest rates by 25 basis points in June, and a 4% chance Some of them cut interest rates by more than 25 basis points before July.

Utyshchenko also noted that broader sentiment to reduce risks was also driven by “growing concerns that the US-Iran conflict could escalate again, with Donald Trump essaying the ‘calm before the storm’.”

Reflecting Bitcoin’s 6.7% decline last week and weekly ETF inflows, investor sentiment on the cryptocurrency fear-greed index has risen. decreased to 25, indicating “extreme fear.”

Looking forward

Despite bearish sentiment, several structural factors could mitigate further declines.

Vitel Lund, head of research at K33 Research, has previously suggested that Strategy’s perennial favorite stock, STRC, could be… Fueling repeated marches in the middle of the month For Bitcoin.

While strategy demand may help partially or fully offset ETF outflows, it does not appear to be a sufficient factor on its own to sustain a rebound in bitcoin prices, Utyshchenko said, citing similar instances in late January and early February when strategy demand exceeded ETF outflows, without significantly impacting bitcoin’s price.

Although Bitcoin’s total open interest has fallen from $29 billion to $26 billion over the past two weeks, according to… Cryptoquant According to the data, the measure remains high by recent historical standards, indicating continued investor speculation despite falling prices.

The Bitcoin Funding price gauge has turned positive after a multi-month negative streak, indicating that investors are opening long positions despite the recent decline that broke out. $670 million liquidation Last week.

The most important factor is long-term holder behavior, suggesting that these groups “continued to accumulate Bitcoin continuously for months on a scale much larger than the MSTR, even as an increasing portion of their supply turned into an unrealized loss,” Utyshchenko said.

This “limits the downside potential for Bitcoin,” he said, noting that this was a “sign of long-term conviction” despite short-term volatility. This hypothesis is supported by countless users, who remain optimistic that Bitcoin’s next move will take its price to $84,000, setting the price higher. 77% chance On that result. However, recent events have tempered their enthusiasm somewhat, with that number down from its highs of 89% last week.