The recent trend of Spot Bitcoin ETFs experiencing outflows for the past week has caused concern among investors. These outflows have coincided with a decline in the Bitcoin price, indicating that institutional sell-offs and miner sell-offs could be contributing to the trend. Data from Coinglass shows that these funds have now seen seven consecutive days of outflows, with an average of around $100 million being pulled out daily, totaling approximately $1.2 billion so far.
While the current outflow trend is alarming, it is not the first time that Spot Bitcoin ETFs have experienced a week of continuous outflows. Back in April-May 2024, these funds similarly bled for seven consecutive days, with an even higher degree of outflows than the current situation. In fact, the largest single-day outflow during that period was recorded at $563.7 million on May 1.
Looking back at the previous instance of prolonged outflows provides some insight into what might happen next. Following the seven days of outflows in May 2024, the funds eventually saw inflows for two days before experiencing outflows again. However, this marked the beginning of a recovery phase as institutional investors gradually re-entered the market. From May 13 onwards, the funds recorded 19 consecutive days of inflows, setting a new record. This could suggest that a turnaround for the Spot Bitcoin ETFs is possible in the near future, especially with the recovery in the Bitcoin price.
Despite the recent price drop to $60,000, Bitcoin is still trading comfortably above its 200-day moving average of $50,613, indicating long-term bullish sentiments among investors who are choosing to hold onto their assets. However, the cryptocurrency’s performance on shorter timeframes has been lackluster, falling below both its 50-day and 100-day moving averages of $65,403 and $63,928, respectively. These levels are crucial for determining the short and mid-term performance of Bitcoin.
Despite the challenges faced by Bitcoin in the current market, there are signs of a potential upside. The cryptocurrency is starting to show positive momentum on the daily chart, with a 35% increase in trading volume and a recovery above the $61,000 resistance level. This could indicate that Bitcoin is on the path to a price rebound, especially if the historical trend of recovery after prolonged outflows repeats itself. As demand for Bitcoin grows, driven by institutional investors re-entering the market, we could see significant inflows into the Spot Bitcoin ETFs and a subsequent increase in prices.