Bitcoin (BTC) Price Action Decouples from Spot ETF Flows as Whales Focus on Short-Term Profits

Bitcoin price pulled off a 12.81% rally this week, despite noting outflows from Bitcoin Spot ETFs for a week prior to Wednesday.

Bitcoin price action has, for the most part, moved in tandem with Spot ETF flows. However, that has not been the case recently. For instance, BTC managed to pull off a 12.81% uptick from its lowest price point earlier this week to hit a local high of $100,175 on Wednesday. Meanwhile, Bitcoin Spot ETFs saw only negative flows for a week prior to Wednesday.

In other words, Bitcoin managed to pull off the rally this week, despite the Spot ETF outflows. This highlighted a sort of decoupling, one which may also play out for the rest of the week.

However, on 15 January, Bitcoin Spot ETF flows recorded $755.1 million in inflows. This marked the third highest daily flows recorded so far this month.

It’s also worth pointing out that despite these findings, the last 24 hours did see BTC fell marginally with losses of just over 1.5% on the charts.

Bitcoin’s short term wedge pattern remains in focus amid dull activity

At the time of writing, Bitcoin was priced at $99,236. Moreover, further downside on the charts seemed to be a genuine possibility.

The reason for the potential downside is that Bitcoin’s latest price uptick retested a descending resistance line. It also showed some sell pressure in the last 24 hours – A sign that the resistance level was still strong.

Furthermore, on-chain data showed that BTC has been seeing outflows in the spot segment. In fact, the cryptocurrency had $156.01 million in spot outflows in the last 24 hours alone.

The surge in spot outflows suggested that investors are still geared towards booking profits in the short term. This could potentially offer an insight into the current demand – A sign that the short-term sentiment is not heavily bullish.

Whale activity also lined up with the short-term sentiment where the latest large holder flow data showed 1,420 BTC inflows on Wednesday, as against 494 BTC in outflows during the same period. Demand from whales was higher, hence influencing the bullish performance.

However, at the same time, it’s also worth noting that overall demand was weak. Especially when compared to December’s demand spikes.

Low whale participation highlights a level of indecision in the market. This could indicate that Bitcoin’s price is still bound to retest the resistance level after which a potential price pullback can be expected. However, investors must watch out for major developments that could sway the market.