The momentum of Bitcoin ETFs (Exchange Traded Funds) also declined as BlackRock’s inflows decreased significantly. On March 20, BlackRock’s inflows reached $49.28 million, while Grayscale’s ETFs recorded even higher outflows of $386 million.
The spot Bitcoin ETF recorded negative flows for two days in a row. According to data from financial research platform SosoValue, Grayscale’s ETF GBTC recorded a significant outflow of $386 million on March 20. The day before, the same ETF recorded an outflow of $443 million, reflecting increased selling pressure on Bitcoin.
Other ETFs failed to compensate for the outflow, according to SoSo Value data shared by WuBlockchain. BlackRock’s IBIT recorded the highest inflow on the same day at $49.28 million.
The value of Bitcoin has risen due to significant inflows since the U.S. SEC approved the ETF in January. However, the recent decline in inflows suggested that institutional influences may have contributed to the 8.66% decline in Bitcoin price over the past seven days.
Despite buying pressure reappearing with Bitcoin trading at $67,018, if outflows continue to exceed inflows, BTC could fall below $60,000.
The bulls are attempting to counter the bearish sentiment prevalent in the market. Coin Edition pointed out a noticeable bearish bias based on technical analysis. The 4-hour BTC/USD chart shows a dead cross with the Exponential Moving Average (EMA) with the 20 EMA (blue) falling below the 50 EMA (yellow), signaling a strengthening downtrend. Bitcoin price also fell below the 50 EMA, suggesting that the recent uptrend may be coming to a halt.
For now, Bitcoin could be on the decline and the potential target could be around $58,463 if the bulls fail to maintain pressure. Conversely, a surge in buying pressure could push the coin up to $70,202.
Derivatives markets have also seen significant activity, with Bitcoin’s recovery leading to significant liquidations. Coinglass reported that over $317.55 million worth of BTC contracts were liquidated due to high leverage or insufficient funding fees. Sell positions accounted for the majority of liquidated positions, with long positions also being liquidated due to volatility.
A series of liquidations could further impact the price of Bitcoin from a trading perspective, with short selling likely to become more aggressive if BTC falls below $60,000.
In summary, the decline in Bitcoin ETF momentum combined with technical indicators and derivative market activity suggests a challenging environment for the cryptocurrency in the near term.
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