Bitcoin Bounces Back Above $70,000 Amid Unprecedented Bitcoin ETF Outflows
Summary:
Bitcoin (BTC) has rebounded above $70,000 for the first time in a week, symbolizing a recovery from a stream of negative cash inflows into BTC spot ETFs observed last week. This follows a period of declining prices where BTC went as low as $60,771. Reports revealed outflows into spot Bitcoin ETFs totaled $904 million over the past week. The movement of previously dormant BTC coins into circulation and growing transaction volume suggest a possible future increase in price volatility. Despite a thriving altcoin sector, Bitcoin maintains its dominance in the market at 51.77%.
In its first increase in a week, Bitcoin (BTC) has rebounded over the $70,000 threshold, recovering from a series of negative cash inflows into BTC spot exchange-traded funds (ETF) observed last week. On March 25, the BTC value ascended from an initial $67,212 to a daytime peak of $70,306, according to information gathered from Cointelegraph Markets Pro and TradingView. At last check, BTC was listed at $70,268, marking a 7.5% increase in the past 24 hours.
This return follows a period of declining prices, where cryptocurrency went as low as $60,771, backed by negative ETF cash influxes. This raises the question of whether the increase in numerous BTC price measurements foreshadows future trends.
Outflows into BTC ETFs totaled $904 million over the past week. Following a 7-week, $12.3 billion-worth cycle of capital inflows into crypto investments, last week saw a withdrawal over $942 million, according to a CoinShares report from March 25. This marked the first outtakes after a record 7-week span of taking in cash, which resulted in an overall decline in crypto prices, shrinking total assets under management (AuM) by $10 billion. However, it is still higher than the former cycle's peak at $88 billion.
A CoinShares analyst, James Butterfill, attributed the significant outflows to a correction in recent prices, which resulted in a slower influx of cash into new ETF issuers in the United States. New ETF issuers in the U.S reported $1.1 billion in cash flow, partially counterbalancing Grayscale's major $2 billion outflows last week.
Bitcoin saw the brunt of the negative sentiment, accounting for 96% of the outflows, amounting to $904 million. Even short-Bitcoin reported minor outflows equal to $3.7 million.
Moreover, the spot Bitcoin ETFs' considerable outflows in the past week are believed to be closely linked to the bankrupt lender Genesis selling GBTC shares, according to James Seyffart, a Bloomberg analyst.
Recently, previously inactive BTC addresses have become active as noticed in the Age Consumed metric. The metric reveals a potential increase in future price fluctuations and a revival in network activity as formerly dormant Bitcoin is now engaged in transactions. This is further confirmed by an increase in transaction volume.
Even as Bitcoin increases, the CoinShares report mentions that altcoins did relatively well last week, with net inflows equalling $16 million. Large-cap altcoins such as BNB Chain's BNB, Dogecoin (DOGE) and Toncoin (TON) have outperformed Bitcoin within the past week.
At the time of this report's writing, the total cryptocurrency market stood at $1.191 trillion, which is 43% below the maximum peak of $1.707 trillion achieved in November 2021. The weekly relative strength index (RSI) lies within the overbought range at 83, implying that the altcoin market still has a bullish inclination.
However, it won't be altcoin season yet, according to Blockchain Center, until 75% of the top 50 coins perform better than Bitcoin over a 90-day season. Yet, there are speculations about a possible altcoin season soon.
This article is not meant to provide investing guidance or recommendations. It's important that readers conduct their independent research before deciding due to the risks associated with every investment and trading move.
Published At
3/25/2024 10:40:00 PM
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