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Cryptocurrency News Articles
Large Spot Bitcoin ETF Inflows Ignite Worries of History Repeating and BTC Price Sliding
Oct 25, 2024 at 01:47 am
Historically, this kind of activity has been followed by bearish price movements, and we may be seeing the beginning of a price dip as a result.
United States exchange-traded funds (ETFs) tracking the price of spot Bitcoin (BTC) have garnered a large amount of inflows recently, concerning analysts who believe it could indicate an upcoming downturn in the price of Bitcoin.
“This kind of activity has historically been followed by bearish price movements, and we may be seeing the beginning of a price dip as a result,” Shubh Varma, CEO and co-founder of Hyblock Capital, wrote in an Oct. 23 analyst note covered by Cointelegraph.
Large inflows into spot Bitcoin ETF spark concern
Varma noted that “there have been unusually large BTC ETF inflows over the past several days, with inflows exceeding $300 million on multiple occasions.”
Between Oct. 11 and 21, spot Bitcoin ETFs saw a seven-day streak of inflows totaling around $2.68 billion before seeing an outflow day of $79.1 million on Oct. 22, according to Farside data.
Oct. 23 began recording inflows again, with total daily inflows of $192.4 million.
Spot Bitcoin ETFs have seen cumulative flows of around $21.41 billion since the January launch. Source: Farside
The last time there were “unusually” large inflows into spot Bitcoin ETFs, the price of Bitcoin dropped 13% around three weeks later.
On June 4 and 5, spot Bitcoin ETFs saw inflows of $886.6 million and $488.1 million, respectively, while Bitcoin traded between $68,800 and $70,000.
By June 25, just 20 days later, the price of Bitcoin had fallen to $60,266.
Related: Bitcoin’s repeating bearish engulfing trend and spot ETF outflows boost odds of sub-$60K BTC
Analysts suggest ‘supply shock’ on the horizon
Varma stated that if history does repeat and Bitcoin decreases, analysts will “want” to see “large outflows” in the spot Bitcoin ETFs.
However, other analysts believe the large amount of inflows may be a sign that a supply shock may be coming.
“This is fucked up. They are buying the ETF to try and keep the price of BTC up. We had a supply shock in March 2020 and price went up 5X. I wonder what happens next,” North Node Capital chief investment officer and Bitcoin advocate Pentosh1 wrote in an Oct. 23 X post.
Market analyst Anup Dhungana speculated that a “supply shock looms large.”
Meanwhile, data from crypto exchange Deribit shows that Bitcoin options traders are optimistic that the price of Bitcoin will reach around $80,000 by the end of November, just three weeks after the US presidential election.
Magazine: The rise of Mert Mumtaz: ‘I probably FUD Solana the most out of anybody’
This article does not contain investment advice or recommendations. Every investment and trading move carries a risk, and readers should conduct their own research when making a decision.
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