Simply put
- The Spot Bitcoin ETF has seen nearly $1 billion in outflows over the last three days.
- Bitcoin’s rebound may hit barriers between $92,100 and $117,400, with significant buyers likely to break even.
- Data from the options market indicates that the momentum from January may be fading, as call options are turning negative and expectations are shifting toward a period of stability.
On Thursday, U.S. spot Bitcoin exchange-traded funds noted outflows for the third consecutive day, as the excitement from the New Year starts to wane and traders reassess their positions.
Recent data shows that the Bitcoin ETF experienced $205.5 million in outflows on that day alone, bringing total outflows over the past three days to $934.8 million.
In just two days at the start of the year, inflows had outstripped outflows. However, the overall seven-day net flows—adding all flows in that timeframe—still showed a positive $240.7 million.
While ETF flows may lag behind the overall cryptocurrency market sentiment, they can often reinforce the general direction of asset pricing.
Bitcoin’s year-to-date gains have decreased from 8% on Wednesday to 4% by Thursday afternoon.
“It’s understandable that ETF investors are becoming more risk-averse,” remarked Sean Dawson, who heads research at the options platform Derive. “Current flows are more indicative of shifts in sentiment and tactical positioning rather than a complete drop in demand.”
He mentioned various factors contributing to the ongoing outflows: a reallocation of capital post-New Year, Bitcoin’s struggle to overcome resistance near $92,000, and growing economic uncertainties influenced by U.S. policies, alongside deterioration in domestic economic indicators like rising unemployment insurance claims.
What’s holding back Bitcoin’s recovery?
The drop in ETF demand aligns with a notable supply wall within the Bitcoin network.
This year’s rally has pushed Bitcoin past $94,000, entering a zone where recent major buyers have clustered between $92,100 and $117,400, as reported by Glassnode.
According to analysts at Glassnode, “The market is experiencing heightened sell-side pressure as these investors look to break even without realizing losses. Any effort to revive a sustained upward trend will likely need time and resilience to absorb this overhead supply.”
Dawson also pointed out that the decline in momentum has pushed the short-term call skew into negative territory once more, hinting that the price surge from early January may have come to an end.
If Bitcoin manages to stabilize and attempt another rally, the cost basis of $98,900 for short-term holders will be a crucial level to monitor.
