Bitcoin is still struggling to regain its all-time high even after an impressive late-day recovery. The rise from $60,000 to $68,000 has undoubtedly reignited confidence in the market, but the cryptocurrency continues to face some challenges in its bid to reach a new all-time high.
The outflows continue to rock Bitcoin ETFs
In recent months, Spot Bitcoin ETFs have done very well in terms of inflows, reaching record after record. This caused issues like BlackRock to accumulate a large number of coins in a short period of time, which helped push Bitcoin to new all-time highs.
However, as the market gets used to the Spot Bitcoin ETFs being part of the daily investment, outflows are starting to increase. These outflows have mainly come from the Grayscale Spot Bitcoin ETF, as investors flee the fund due to their high costs. The same was the case in January, triggering a market crash.
In recent days, outflows have dominated ETF net flows. Coinglass data shows that net flows turned negative for the first time at the start of the week on March 18, with $154.3 million flowing out of the funds. The next day, March 19, another $326.2 million left the funds, leading to higher negative flows than the day before. Then, on March 20, net flows were negative again, with $261.5 million disappearing from the funds.
This trend marks the first time since January that Spot Bitcoin ETFs have seen three consecutive days of outflows, which is in stark contrast to the previous week, when daily inflows hit a new all-time high of $1.04 billion on March 12.
BTC price drops under selling pressure
The selling pressure Bitcoin is currently experiencing is similar to that seen in January, shortly after the US Securities and Exchange Commission (SEC) gave the green light to Spot Bitcoin ETFs for trading. The BTC price also crashed during this period, falling to a low of $38,000.
However, Bitcoin’s price started to rise right after the grayscale outflows subsided, giving demand enough time to catch up with supply. As before, the outflow is led by Grayscale and until the outflow slows, BTC may continue to fall.
However, if the tide were to turn from here, Bitcoin would gain a lot of runway. A similar surge, as recorded after the outflow ended in January, would easily push the price above $75,000, which would be a new all-time high for cryptocurrency.
For now, BTC is trading at $67,320, up 5.51% in the past 24 hours.
BTC price crosses $67,000 | Source: BTCUSD on Tradingview.com
Featured image from Inside Bitcoins, chart from Tradingview.com
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