Bitcoin is still struggling to regain its all-time high even after showing an impressive recovery on the last day. The rally from $60,000 to $68,000 has undoubtedly reignited confidence in the market, but the cryptocurrency continues to face some challenges in its attempt to reach a new all-time high.
Outflows Continue to Rock Bitcoin ETFs
In recent months, Spot Bitcoin ETFs have done very well when it comes to inflows, breaking record after record. This caused issues like BlackRock to accumulate a large number of coins in a short space of time, which contributed to Bitcoin reaching new all-time highs.
However, as the market becomes accustomed to Spot Bitcoin ETFs as part of everyday investing, outflows have started to increase. Mostly, these outputs were from grayscale Spot Bitcoin ETF as investors flee the fund due to its high fees. The same thing happened in January, which triggered a market crash.
In recent days, outflows have dominated ETF net flows. Data from Coinglass shows that net flows turned negative for the first time at the start of the week of March 18, with $154.3 million leaving funds. The following day, March 19, another $326.2 million left the funds, leading to higher negative flows than the previous day. Then, on March 20, net flows were negative again, with US$261.5 million leaving the funds.
This trend marks the first time since January that Spot Bitcoin ETFs have had three consecutive days of outflows, which is in stark contrast to the previous week, which saw daily inflows reach a new all-time record of US$1.04 billion on March 12.
BTC Price Falls Under Selling Pressure
The selling pressure Bitcoin is facing now is similar to that seen in January, shortly after the United States Securities and Exchange Commission (SEC) gave the green light to Spot Bitcoin ETFs for negotiation. O BTC Price also suffered declines during this period, dropping to $38,000.
However, the price of Bitcoin began to rise shortly after Grayscale outflows slowed, giving demand enough time to catch up with supply. Just like before, outflows are being led by Grayscale and until outflows slow, BTC could continue to decline.
A change in tide from here, however, would give Bitcoin a lot of upside. A similar surge, as recorded after the outflows ended in January, would easily put the price above $75,000, which would be a new all-time high for the cryptocurrency.
For now, Bitcoin is trading at $67,320 with an increase of 5.51% in the last 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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