Bitcoin Leads $528M Outflows: Market Insights

Bitcoin (BTC) topped the list in negative flows last week as digital asset investment products saw outflows totaling $528 million. The turnout preceded the ongoing crypto market crash, with BTC still on the frontline.

Crypto markets continue to bleed, starting the week off badly. Nevertheless, the crash may provide an opportunity for willing investors to buy the dip.

Bitcoin Saw $400 Million Outflows Last Week

With total crypto investments outflows reaching $528 million, Bitcoin led the negative flows with $400 million. Ethereum followed with $146 million in outflows, bringing the net outflows since the ETH ETFs (exchange-traded funds) launch in the US to $430 million. Solana recorded $2.8 million in negative flows.

For Bitcoin, it marked the first outflow after five weeks of positive flows. CoinShares researchers ascribe it to market fears, citing concerns of a recession in the US, geopolitical turmoil, and “consequent broader market liquidations across most asset classes.”

Markus Thielen, Founder and CEO at 10x Research, seems to agree with the recession argument in a statement to BeInCrypto.

“Bitcoin and Ethereum tend to underperform during periods that resemble or approach a recession in the United States. Additionally, investors are reducing their positions as prices have fallen below the average entry point for ETF investors, which is approximately $60,000,” Thielen said.

Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach

The US session’s opening will be interesting to watch, given this market closed on Friday with Bitcoin at $61,498. Between then and Monday, BTC has lost over $10,000 worth of value, which will likely trigger a response from ETF investors once the market opens on Monday.

Specifically, investors should expect price adjustment, potentially leading to a sharp drop in the Bitcoin ETFs’ trading price. Subsequently, investors’ reactions could cause increased volatility in the ETF market, with some selling their holdings to avoid further losses. Others may yet see it as a buying opportunity, with both perspectives driving trading volume as investors adjust their positions.

“While institutions might incur losses of 20% or 40%, they won’t hold positions until they become worthless. Every trader, institutional or retail, must take responsibility for risk management and establish an acceptable threshold for remaining long in their positions,” Thielen stated.

Bitcoin Drop to $42,000 Would Send Ethereum to $2,000

The research highlights that ETF investors bought the dip when Bitcoin dropped below $60,000 in July. This accumulation came despite the average ETF holder experiencing losses, rendering $60,000 the level where BTC mining becomes unprofitable for the industry. It fuels significant price declines amid miners’ high beta.

Accordingly, the researchers anticipate Bitcoin’s price dropping to $42,000 after the $55,000 support level capitulated. This could draw Ethereum down to $2,000, with the researchers citing economic weakness, ongoing weak market structure, on-chain data, and cycle analysis, which suggest further stress ahead. Notably, the researchers have gained prominence after multiple nearly spot-on predictions.

Among them, in October 2022, the experts predicted a 2024 halving price target of $63,160 for Bitcoin, but BTC topped out at around $63,491 on April 20. They also called a $45,000 year-end target in 2023, which ended at $43,613. In February, researchers at 10X set a 2024 Bitcoin target at between $60,000 and $70,000.

Read more: How To Buy Bitcoin (BTC) and Everything You Need To Know

Nevertheless, crypto markets, like other financial markets, are dynamic, with new information changing previous outlooks. Even as sleuths continually reevaluate and analyze the markets, traders must conduct their own research and appreciate the volatility of crypto.