Bitcoin Price Dips as ETF Outflows Surge

Amidst elevated outflows from US-listed Bitcoin ETFs, Bitcoin's price has fallen from $64k to $62k, with a daily net outflow of $217 million. Analysts predict a bearish continuation that could drop BTC to $59k if it breaches the $63.3k support level. The correlation between Bitcoin ETF prices and inflows has weakened, and liquidations have reached $60 million in the past 24 hours.

Bitcoin Price Declines Amidst Ongoing ETF Outflows

The price of Bitcoin (BTC) has experienced a decline, falling from $64,000 to $62,900 at the time of writing. This downturn coincides with a significant net outflow of funds from US-listed Bitcoin Exchange Traded Funds (ETFs).

Daily data indicates a net outflow of $217 million from these ETFs, contributing to a weekly total of $244.49 million in outflows. The Fidelity Wise Origin Bitcoin Fund, the first of its kind in the US, has reported a $23 million withdrawal, marking its first such occurrence since January 11th. Grayscale, a leading cryptocurrency investment manager, has also witnessed an outflow of $417 million in the past week, extending its withdrawal streak to 72 days.

The prevailing US inflation data has been cited as a potential factor influencing these outflows, as it suggests rising borrowing costs and improving Treasury yields, which can negatively impact speculative assets such as cryptocurrencies.

Noelle Acheson, author of the Crypto "Is Macro Now" newsletter, has commented on the situation, stating that "we can expect BTC to take a breather as long as the macro mood continues to support higher yields."

JPMorgan has noted a weakening correlation between Bitcoin ETF prices and inflows amidst these prolonged outflows. In January, the correlation stood at around 0.84, but has since declined to 0.60. Analyst Ken Worthington interprets a reading above 0.70 as indicating a strong correlation, while a value just below that level represents a "moderately correlated" relationship.

In the last 24 hours, liquidations have reached $60 million, with BTC accounting for $13.48 million. Of this amount, $6.17 million in longs and $7 million in shorts were liquidated.

Despite market volatility, analysts remain cautiously optimistic about Bitcoin's long-term prospects. RektCapital, a popular cryptocurrency analyst, predicts another potential downturn within the next two weeks, comparing the current correction to a similar pullback experienced in 2016. RektCapital suggests that Bitcoin typically undergoes two corrective waves: one before and one after a halving event.

Ali Martinez, another analyst, has observed sell signals on BTC's 12-hour chart. He expects Bitcoin to fall to $61,000 or even $59,000 if it breaks below $63,300.

Despite these short-term fluctuations, analysts anticipate Bitcoin to maintain support above $60,000 for the next two weeks, staying above the post-halving danger zone until next month.