In line with the decline in Bitcoin price, the Bitcoin ETF spot market has been looking quite gloomy in recent days. According to data from analytics firm BitMEX Researchthese BTC ETFs recorded a negative net flow into the last four trading sessions.
This situation was marked by large levels of outflows from Grayscale’s GBTC and record low inflows into the other ETFs, notably market leaders BlackRock’s IBIT and Fidelity’s FBTC. However, amid these persistently declining network flows, Ki Young Ju, a prominent analyst and CEO of Cryptoquant, predicted a possible resurgence in the Bitcoin ETF spot market.
Analyst points to US$56,000 level as critical for Bitcoin ETF recovery
On a publish in X on March 22, Ki Young Ju shared that an increase in net flows from spot Bitcoin ETFs could occur even if the BTC price decline continues. Using data from historical netflow trends, the analyst noted that demand for Bitcoin ETFs generally kicks in when the cryptocurrency hits certain support levels.
Young Ju stated that in particular, new BTC whales, especially ETF buyers, have been shown to have an on-chain cost basis of $56,000. This suggests that significant new Bitcoin holders, especially those invested in ETFs, typically purchased Bitcoin at an average price of $56,000. Following this trend, the quantitative crypto chief believes that the Bitcoin ETF spot market could see massive inflows if BTC reaches the specified price level.
#Bitcoin spot ETF net flows are slowing.
Demand could recover if the $BTC the price approaches critical support levels.
New whales, mainly ETF buyers, have an on-chain cost basis of $56,000. Corrections typically involve a maximum drawdown of around 30% in bull markets, with a maximum impact of $51,000. pic.twitter.com/vZCG4F0Gh5
-Ki Young Ju (@ki_young_ju) March 22, 2024
For now, the price of Bitcoin has fluctuated. between US$62,000 and US$68,000, as seen last week. However, Young Ju believes that such a decline is quite feasible, as price corrections typically see a maximum drop of 30%. Using BTC’s most recent high of $73,750, the analyst predicts the asset’s price could still trade as low as $51,000.
BTC Price Overview
To date, Bitcoin continued it traded at $64,065.74, representing a decline of 3.73% and 7.17% over the last seven days. Meanwhile, the asset’s daily trading volume fell by 3.53% and was valued at $39.62 billion.
Following historical bull cycle trends, it is possible that BTC reached its peak price before the halving event in April. If this is the case, Bitcoin is unlikely to return to its previous high price levels anytime soon and could experience further price declines in the coming weeks.
BTC trading at $64,315.00 on the hourly chart | Source: BTCUSDT chart on Tradingview
Featured image from Euronews, chart from Tradingview
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