For the first time since its launch, the Spot Bitcoin [BTC] ETF saw a 10-day outflow streak.
Between 15th and 29th May, Bitcoin ETFs sold $2.96 billion. BlackRock’s IBIT saw maximum outflows worth $2.11 billion over the last 10 days, followed by Fidelity’s FBTC.
Meanwhile, many asset managers observed zero flows during these ten days. Interestingly, Morgan Stanley’s MSTB, which is relatively new to the market, saw $5.4 million in outflows over these ten days.
Is BlackRock concerning?
Many in the crypto space came in defense of BlackRock as they noted,
Guys, BlackRock is not buying, nor selling $BTC. Its clients are. And most of them are retail, just like the rest of us.
The user explained that during the first two years, the inflows and outflows were always in line with local tops or bottoms. This is because retail is often emotional and either buys at the top or sells at the bottom.
Did ETFs drag BTC price down?
This occurred when the price of Bitcoin was trading at $80K and then dropped to $73K.
However, following a slight uptick, Bitcoin was trading at $73,807.36 at the time of writing. This indicated that the ETF withdrawals were the cause of the price decline.
Remarkably, the Spot Ethereum [ETH] ETF experienced a three-week outflow streak.
Needless to say, the price of ETH also dropped from $2300 to $2,019.07 at the time of writing, mirroring the ETF outflow.
Positive funding rate and more
At the same time, the OI-Weighted Funding Rate for Bitcoin was rising and very positive, indicating that most traders were paying funding fees to short sellers and opening long positions.
Simply put, too many traders are optimistic when the price is declining. Therefore, if buyers do not intervene and push Bitcoin back above recent resistance levels, this frequently indicates weakness and may result in a long squeeze.
A similar situation was recently reported by AMBCrypto, wherein Bitcoin ETFs were experiencing outflows, along with rising Funding Rates and declining Spot demand.
Hence, the conclusion was drawn that because it increases the chance of a squeeze, this can be a risky game for traders who are taking long positions.
Final Summary
- BlackRock’s IBIT recorded the maximum outflows in these 10 days of the outflow streak.
- The withdrawals in Bitcoin ETFs also resulted in Bitcoin’s price falling from $80K to $73K.