- Bitcoin Spot ETFs appear to be losing their influence on the market
- Bitcoin could lend itself to a short-term downtrend in the second half of this week
Bitcoin just recorded its first positive Spot ETF flows on Wednesday, after consistent outflows since January 8. However, the latest ETF flows also revealed some other interesting findings about their impact.
Bitcoin’s price action has largely paralleled Spot ETF flows. However, that has not been the case lately. BTC, for example, rose 12.81% from its lowest price point earlier this week, hitting a local high of $100,175 on Wednesday. Meanwhile, Bitcoin Spot ETFs saw only negative flows the week leading up to Wednesday.
Simply put, Bitcoin managed to pull off the rally this week despite the outflows from Spot ETFs. This revealed a kind of disconnect that could also play out for the rest of the week.
Source: Farside.co.ke
However, on January 15, the Bitcoin Spot ETF flows recorded an inflow worth $755.1 million. This was the third highest daily flow recorded so far this month.
However, it is worth pointing out that despite these findings, BTC has fallen slightly over the past 24 hours with losses of just over 1.5% on the charts.
Bitcoin continues to focus on the short-term wedge pattern amid subdued activity
At the time of writing, Bitcoin was trading at $99,236. Moreover, more disadvantage in the charts seemed like a real possibility.
Source: TradingView
The reason for the potential downside is that Bitcoin’s latest price surge once again tested a descending resistance line. It also showed some selling pressure over the past 24 hours – a sign that the resistance level was still strong.
Furthermore, on-chain data showed that BTC has seen an outflow in the spot segment. In fact, the cryptocurrency had an outflow of $156.01 million in the last 24 hours alone.
Source: Coinglass
The sharp increase in spot market outflows suggested that investors are still focused on short-term profit-taking. This could potentially provide insight into the current state of demand – a sign that short-term sentiment is not heavily bullish.
Whale activity also matched short-term sentiment. For example, the latest large holder flow data showed an inflow of 1,420 BTC on Wednesday, compared to an outflow of 494 BTC in the same period. Whale demand was higher, affecting bullish performance.
Source: IntoTheBlock
Although whale demand significantly exceeded outflows, it is also worth noting that overall demand was weak. Especially compared to the demand peaks in December.
The low whale participation speaks volumes about confidence in the market. This may indicate that Bitcoin is still limited to short-term moves, in which case the price is likely to retreat from the resistance level. However, investors should be alert to important developments that could potentially impact the market.