Why BlackRock’s $271M BTC transfer has Bitcoin bulls on edge

After rebounding to $65k, Bitcoin [BTC] has turned bearish again. In fact, BTC dipped to a weekly low of $63,059, then slightly bounced back.

At press time, Bitcoin was trading around $63,524, after falling by 2.8% on the daily charts. Amid the price drop, Bitcoin’s volume rose 72% to $28 billion, suggesting increased market activity.

BlackRock moves $271M in Bitcoin

BTC’s recent decline was mostly driven by a shift in sentiment among institutional investors. BlackRock leads in this market flip.

According to Onchain Lens, BlackRock moved over $271 million worth of crypto to Coinbase Prime. The transfer to the exchange mostly signals preparation to sell. Historically, when BlackRock moved tokens to exchanges, those assets were later sold.

The transfer to the exchange mostly signals preparation to sell. Historically, when BlackRock moved tokens to exchanges, those assets were later sold.

Notably, BlackRock’s activity coincides with a fresh shift in Bitcoin’s ETF inflow. After signaling a return in institutional demand, ETFs have flipped bearish again.

 As a result, BTC spot ETFs closed with net outflows three times. Over this period, spot ETFs recorded $476 million in net outflows.

With outflows dominating ETFs, it suggests that most major institutional players are dumping BTC. In fact, of the 13 ETFs, none recorded inflows, a clear sign of market bearishness.

These conditions are mostly exacerbated by U.S. investors. Notably, the Coinbase Premium Index has remained negative throughout July.

The extended period in the negative zone suggests that institutions have chased out even the slightest of the gains. Historically, Bitcoin has performed poorly on the price charts when institutions pull out capital.

Is the ETF bearish flip a warning sign?

Bitcoin’s prolonged market weakness largely stems from the absence of institutional capital. The recent decline further underscores the lack of participation from these key market players. Once they start selling, BTC drops, and vice versa. Momentum indicators confirm this bearish market flip. 

For starters, Bitcoin Cycle Swing Momentum (CSI) fell into the negative zone and has held there for six days. The indicator dropped to a monthly low, confirming strong downward pressure.

Likewise, ALMA further confirms this downside strength. Bitcoin fell below ALMA, which sat at $64,270 as of writing, showing strong short-term downside pressure.

Taken together, these two indicators warn of the likelihood of extended market weakness. Thus, if institutional investors continue to sell, Bitcoin could drop to $62,500. 

To invalidate this market bearishness, BTC bulls need to flip ALMA at $64,269 and close above $65,700.

Final Summary

• BlackRock’s ETF wallets transferred BTC worth $271 million into Coinbase Prime. 
• Bitcoin  declined 2.8%, amid increased selling pressure from institutional investors, with ETF outflows hitting $476 million.