Bitcoin is down today – Will sustained ETF outflows pull BTC further?
Bitcoin was down because of souring investor sentiment, as reflected in the Spot ETF netflow figures since mid-May.
Bitcoin [BTC] continued its southward race and fell below the $70k round number. Trading at $69.6k at press time, the crypto leader has shed 4.21% over the past 24 hours and 9.1% over the past week.
Investor confidence was falling. Apart from price action, daily spot ETF flows also reflected this. According to SoSoValue’s ETF dashboard, the 1st of June recorded a negative $483.76 million flow.
The netflows have been negative for every Spot ETF trading day since the 15th of May. Since that day, Bitcoin has shed 14.18%, falling from $81,090 to $69,590.
Heightened Bitcoin whale activity sets off alarms
In a post on X, crypto intelligence platform Santiment posted that there was an increase in BTC transactions with a value of $100k or more. This was the highest since the 22nd of April.
While the post noted that this kind of whale activity, historically, signaled strong accumulation, the current move’s context was likely different.
Examining the Bitcoin net transfer volume to and from exchanges, AMBCrypto found that inflows outweighed outflows. The 7-day moving average has been positive since the 18th of May.
As more BTC enters exchanges, it becomes more likely that whales and other market participants are selling, not accumulating.
Falling weekly volatility does not mean the market has fallen asleep
Crypto analyst Axel Adler Jr. used the one-week realized price volatility, smoothed out over a 30-day window, to demonstrate volatility compression. The scores fell from 39 in early March to 17 now, close to the lowest recorded levels in the indicator’s history.
Comparing the yearly average difference between the daily growth rates in market cap and realized cap, the analyst found that BTC’s market value is not keeping up with the network’s realized value.
The negative delta showed that the market was far from trading at a premium, something that happens during bull phases when investor confidence is high.
A quietly coiling long-term volatility signaled cooling conditions, while the market premium continues to compress.
Bitcoin was building up for its next big move, if it has not embarked on it already.
Following the higher timeframe structure, it becomes clear why Bitcoin is likely to continue to go down. The rally from March to May was a relief move that almost challenged the 61.8% Fibonacci retracement level at $83.4k.
The bulls put up a fight, but this battle has since turned into a meek surrender. At the time of writing, BTC was trading below $70k and was likely headed toward the 23.6% extension level at $51k.
Final Summary
- Among other reasons, Bitcoin was down because of souring investor sentiment, as reflected in the spot ETF netflow figures since mid-May.
- The long-term price trends indicate a move toward $51k is possible.
