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In a surprising turn of events, just a day after analysts indicated that substantial inflows into spot ETFs were necessary for Bitcoin to rise above $87,000, recent data revealed a contrary trend. On Wednesday, U.S. spot ETFs experienced net outflows totaling $487.1 million, marking the largest such exit since June 25, as reported by data provider SoSoValue.
Recent fund flows have been highly volatile. Following net inflows of approximately $2.65 billion in September, October has seen a decrease of $165.6 million to date. The last six trading sessions have fluctuated between minor inflows and outflows.
The outflow recorded on Wednesday was notably significant, falling about 2.1 standard deviations below the average daily flow over the previous 90 days, which typically averaged around $92 million in inflows. Such a substantial deviation indicates an unusual and noteworthy event.
Year-to-date, the funds have accumulated a net total of $717 million, a mere buffer above zero, especially following a cumulative net outflow of $5.76 billion recorded in July. Since the inception of trading in January 2024, the total net inflow stands at $57.33 billion.
Currently, Bitcoin is trading at approximately $83,000, testing a price floor that has persisted since the rally's halt on September 21. Analysts caution that a sustained decline below this level could bring Bitcoin down to $80,000 and disrupt the established bullish trend seen on the daily chart.
Alex Kuptsikevich, chief market analyst at FxPro, noted in an email, "The $80.5K–$81.5K range includes last month's local highs and the 50-day moving average. It may not be challenging for bearish traders to push the price into this area. It is critical to observe whether this attracts bargain hunters or forces margin buyers to capitulate. In the former scenario, we could see a swift retest of the highs; in the latter, a rapid drop to $76K (recent lows) or $72K (the 200-day moving average) is possible."
Furthermore, fluctuating Treasury notes pose a potential challenge, compounded by escalating tensions between the U.S. and Iran, which could lead to increased oil prices. The recent decline in spot ETF inflows, which were a significant factor during the August-September rally, might have detrimental effects on the market. Investors are advised to remain vigilant!
Read more: For insights into today's altcoin and derivatives market activity, check out Crypto Markets Today. For a full list of events this week, refer to CoinDesk's Crypto Week Ahead.