Bitcoin’s rally back to the mid $73,000s region didn’t last long as the price action of the leading cryptocurrency reversed as the week came to an end, falling back around $67,000 after briefly regaining momentum last week, dragging Ethereum down until the ETH price also lost the $2,000 price level.
However, the decline of these leading cryptocurrencies is the product of a few forces immediately collide: a war that no one has fully taken into account and institutions that are quietly on their way to the exit. This is what happened.
Spot Bitcoin ETFs: From Boosting the Rally to Tapping Liquidity
One of the clearest reasons for Bitcoin’s turnaround is that the same ETF complex that helped drive the price up early in the week suddenly turned into a source of pressure. SoSoValue data shows US-based Spot Bitcoin ETFs posted strong influx at the beginning of the week, including approximately $458.19 million on March 2, $225.15 million on March 3 and $461.77 million on March 4.
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That stretch helped Bitcoin climb intraday to around $74,051 on March 4, but the tone quickly changed after that. By March 5, spot Bitcoin ETFs had risen to net outflows of about $227.83 million, and by March 6, outflows worsened to about $348.83 million, showing that institutional demand was waning just as Bitcoin was testing resistance near the mid-$70,000s.
Discover Bitcoin ETFs. Source: SoSoValue
Not surprisingly, Ethereum also saw its own exchange-traded flows deteriorate, along with Bitcoin. SoSoValue data shows that US Spot Ethereum ETFs started the week on firmer footing, with net inflows of $38.69 million on March 2, led by BlackRock’s ETHA at around $26.51 million. However, in the second half of the week that demand had decreased enormously.
Spot Ethereum ETFs recorded net outflows of approximately $90.94 million on March 5 and another $82.85 million in net outflows on March 6, with Fidelity’s FETH alone accounting for approximately $67.57 million of the March 6 drawdown.
Discover Ethereum ETFs. Source: SoSoValue
Profit taking and global risk aversion
The last piece is the macro background. The jump from $73,000 to $74,000 invited short-term traders to lock in gains, especially after Bitcoin encountered a clear resistance band and failed to break through decisively. On a chain data shows that more Within 24 hours, more than 27,000 BTC in profits were sent to exchanges by short-term holders.
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However, investors are not only dealing with crypto-related issues. The financial markets are still pricing in the conflicts in the Middle East. Iran responded The US and Israel are attacking by not only launching retaliatory strikes but also by effectively closing the Strait of Hormuz, a passageway for roughly a fifth of the world’s oil supply. That shutdown really threw the markets into turmoil.
Once Bitcoin lost height, Ethereum followed with even more strength. At the time of writing, Bitcoin is trading at $67,500. Ethereum, on the other hand, is trading at $1,975.
Featured image created with Dall.E, chart from Tradingview.com