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Bitcoin ETP Outflows Spell Bearish Sentiment Among Institutional Investors

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Bitcoin ETP Outflows Spell Bearish Sentiment Among Institutional Investors

Bitcoin ETPs have become more popular than ever since the SEC approved multiple bitcoin ETPs in the fourth quarter of 2021. They had subsequently had a good run with hundreds of millions of dollars flowing into these ETPs. They provided a way for institutional investors and others who didn’t want any direct exposure to the digital asset to trade on it. However, it seems the wind is starting to change as outflows become the order of the day.

Outflows Rock Bitcoin ETPs

The market is still reeling from entering a new month but the effects of the month of April continue to linger. Being a historically bearish month for the digital asset, bitcoin had taken a bit of a beating down in the market, which had unsurprisingly translated into the ETPs.

Related Reading | Bitcoin Institutional Outflows Near One-Year Highs, More Downside Coming?

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The result of this was outflows that rocked the market. April sticking to form had recorded the highest monthly net outflows ever recorded in the history of Bitcoin ETPs. In total, there was a total of 14,327 BTC that flowed out of the market in this dreadful month. This, in turn, had caused the total asset under management (AUM) of the digital asset to decline drastically that by the end of the month, there were only 187,000 BTC in AUM.

It is obviously the worst month for the ETPs since they became a thing. The US and Canadian bitcoin ETPs were not spared of the onslaught either. In the US markets, a total of 3,312 BTC had flowed out of the ETFs, while their Canadian counterparts saw an even worse trend with 7,100 leaving BTC ETPs. This translated to a 10% decline in BTC AUM in the North American country. 

Outflows rock BTC ETPs | Source: Arcane Research

It is important to note that all US outflows had been recorded in the BITO. Exposure to bitcoin of US ETFs also declined significantly in the month of April. It now sits 11% less than where it used to in the previous month. 

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In Europe, it was the same trend as its American counterparts. The region which had been battling outflows for the better part of a year saw 3,974 BTC leave the market at the same time. April had helped to mark 10 months out of 16 months that European ETPs had been rocked by outflows. 

BTC trading in the mid-$39,000s | Source: BTCUSD on TradingView.com

Brazil was the only country spared from the bleeding month of April. It had recorded inflows but these were minor and by comparison, remain quite small when put into the global context. 

Related Reading | Dogecoin Price Could Plunge To $0.11 Owing To A Consistent Downslide

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These outflows that were recorded in the month of April had successfully erased all of the gains that had been made by ETPs in the month of March. However, there is good news amidst this sea of bad news. Australia is getting ready to start trading crypto ETFs. 

It has been announced that one of these ETFs will offer direct exposure to bitcoin. Others will only hold Canadian BTC ETFs, which, in the long run, may prove to be very profitable for the Canadian crypto ETPs.

Featured image from Nikkei Asia, charts from Arcane Research and TradingView.com

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TA: Bitcoin Price Moves Higher In Range, $30.6K Still Presents Resistance

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TA: Bitcoin Price Moves Higher In Range, $30.6K Still Presents Resistance

Bitcoin remained strong above the $28,500 support against the US Dollar. BTC is rising, but it must clear $28,500 to move into a positive zone.

  • Bitcoin started a fresh increase after it tested the $28,500 support zone.
  • The price is now trading above the $29,500 level and the 100 hourly simple moving average.
  • There was break above a major bearish trend line with resistance near $29,800 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could continue to move higher towards the key $30,600 resistance zone.

Bitcoin Price Forms Triple Bottom

Bitcoin price extended decline below the $29,500 support zone. However, the bulls were active near the main $28,500 support zone.

A fresh base was formed near $28,600 and the price started a fresh increase. There was a clear move above the $29,200 and $29,500 resistance levels. The price surpassed the 50% Fib retracement level of the downward move from the $30,630 swing high to $28,635 low.

Besides, there was break above a major bearish trend line with resistance near $29,800 on the hourly chart of the BTC/USD pair. Bitcoin price is now trading above the $29,500 level and the 100 hourly simple moving average.

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Source: BTCUSD on TradingView.com

An immediate resistance on the upside is near the $30,160 level. It is near the 76.4% Fib retracement level of the downward move from the $30,630 swing high to $28,635 low. The next major resistance is near the $30,600 level. A clear move above the $30,600 resistance level might start a steady increase. In the stated case, the price may perhaps clear the $31,200 resistance zone.

Fresh Decline in BTC?

If bitcoin fails to clear the $30,600 resistance zone, it could start another decline. An immediate support on the downside is near the $29,600 level.

The first major support is near the $29,500 level and the 100 hourly simple moving average. A downside break below the $29,500 support might send the price further lower. The main support is still near the $28,500 level, where the bulls are likely to take a strong stand.

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Technical indicators:

Hourly MACD – The MACD is now gaining pace in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now well above the 50 level.

Major Support Levels – $29,500, followed by $28,500.

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Major Resistance Levels – $30,150, $30,500 and $30,600.

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Investors May Expect Downside For Bitcoin And Ethereum Market For The Next 3 Months

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Investors May Expect Downside For Bitcoin And Ethereum Market For The Next 3 Months

The crypto markets have accepted the depegging of UST and the subsequent downward spiral of LUNA, both of which impacted the price of Bitcoin and the entire digital asset spectrum. According to a recent report by the Glassnode team, the Bitcoin market has been trading lower for eight weeks, making it the ‘longest continuous series of red weekly candles in history.’

Even Ethereum, the most popular altcoin, painted a similar picture. Bearish fluctuations damage returns and profit margins directly or indirectly.

To make matters worse, derivative markets forecast shows more declines in the coming three to six months.

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Derivative Markets Hint At More Pain For Bitcoin

According to derivative markets, the prognosis for the next three to six months remains fearful of further fall. On-chain, the report stated that blockspace demand for Ethereum and Bitcoin has dropped to multi-year lows, and the rate of ETH burning via EIP1559 has reached an all-time low.

Glassnode calculated that the demand side will continue to face headwinds due to poor price performance, uncertain derivatives pricing, and extremely low demand for block-space on both Bitcoin and Ethereum.

The report explains:

Looking on-chain, we can see that both Ethereum and Bitcoin blockspace demand has fallen to multi-year lows, and the rate of burning of ETH via EIP1559 is now at an all-time-low.

Coupling poor price performance, fearful derivatives pricing, and exceedingly lacklustre demand for block-space on both Bitcoin and Ethereum, we can deduce that the demand side is likely to continue seeing headwinds.

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Both Bitcoin and Ethereum’s price performance over the last 12 months has been disappointing. Long-term CAGR rates for Bitcoin and Ethereum have been impacted as a result of this.

Source: Glassnode

BTC, the largest cryptocurrency, moved in a roughly 4-year bull/bear cycle, which was frequently accompanied with halving events. When looking at long-term returns, the CAGR has dropped from almost 200 percent in 2015 to less than 50 percent as of this writing.

Related Reading | New Data Shows China Still Controls 21% Of The Global Bitcoin Mining Hashrate

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Furthermore, Bitcoin had a negative 30% return over the short term, implying that it corrected by 1% every day on average. This negative return for Bitcoin is very similar to prior bear market cycles.

Source: Glassnode

When it comes to ETH, the altcoin performed far worse than BTC. Ethereum’s monthly return profile revealed a depressing picture of -34.9 percent. Ethereum likewise appears to be seeing diminishing rewards in the long run.

Furthermore, during the previous 12 months, the 4-year CAGR for both assets has dropped from 100% to only 36% for BTC. Also, ETH is up 28 percent per year, emphasizing the severity of this bear.

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To make matters worse, the derivative market warned of future market declines. Near-term uncertainty and downside risk continue to be priced into options markets, particularly over the next three to six months. In reality, during the market sell-off last week, implied volatility increased significantly.

Total crypto market cap stands at $1.2 Trillion. Source: TradingView

The Glassnode analysis concluded by stating that the present bear market has taken its toll on crypto traders and investors. Furthermore, the Glassnode team emphasized that downturn markets frequently worsen before improving. However, ‘bear markets do have a tendency of ending’ and ‘bear markets author the bull that follows,’ so there is some light at the end of the tunnel.

Related Reading | TA: Bitcoin Price Stuck In Key Range, Why Dips Might Be Limited

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Featured image from iStockPhoto, Charts from Glassnode, and TradingView.com

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Bitcoin Price Could Fall To $8,000, Says Guggenheim CIO

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Bitcoin Price Could Fall To $8,000, Says Guggenheim CIO

Hearing more negative speculation would be unpleasant for the investors as the recent bloodbath’s catastrophic effects already slowed down crypto markets. But unfortunately, an expert predicted Bitcoin would go far below.

Scott Minerd, Chief officer at Guggenheim Partners, a global investment and advisory firm handling $325 billion under its management, speculated that the Bitcoin price could plummet to $8,000. He is the same man who once said in December that “Bitcoin price should be $400,000.”

Related Reading | XRP Has Broken Below Its Long-Standing Support, What’s Next?

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The speculation refers to a nearly 70% drop from today’s price of BTC, fluctuating around $30,000.

BTC Could Fall With The Fed Being Restrictive

Speaking with the CNBC’s Andrew Ross Sorkin in an interview held on Monday at World Economic Forum, Switzerland, he said;

When you break below 30,000 [dollars] consistently, 8,000 [dollars] is the ultimate bottom, so I think we have a lot more room to the downside, especially with the Fed being restrictive.

Minerd highlighted the relationship between BTC price and Fed regulation and tightening policies.

Following its previous high of November 10, when BTC’s price marked $69,044, it decreased by around 58% of its value.

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“Most of these currencies, they’re not currencies, they’re junk,” he added, saying that “I don’t think we’ve seen the dominant player in crypto yet.”

Comparing the current situation with the dotcom bubble of the early 2000s, he said;

“If we were sitting here in the internet bubble, we would be talking about how Yahoo and America Online were the great winners,” adding that “Everything else, we couldn’t tell you if Amazon or Pets.com was going to be the winner.”

In addition, he urges that digital currency is required to store value. As well as, become a medium of exchange and a unit of account. “I don’t think we have had the right prototype yet for crypto,” said Minerd.

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Bitcoin price currently trades at over $29,000. | Source: BTC/USD price chart from TradingView.com

Investors Seem Hesitant To Buy Bitcoin Dips

The collapse of stablecoins, including TerraUSD (UST) and its fellow token Luna, has caused the market to suffer a severe blow.

Edward Moya, an analyst from the well-known forex and CFD trading platform of America, OANDA, has commented that Bitcoin prices are steadied even with the broad risk rally on Wall Street. He added;

It looks like most crypto traders are hesitant to buy the dip. Which most likely means that the bottom has not been made.

Moreover, Moya talked about the European Central Bank President Christine, who previously said digital currencies are “worth nothing.”

Related Reading | Solana (SOL) Could Register An Upswing, Thanks To This Pattern

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“It is unlikely that any head of a central bank will endorse bitcoin or the other top coins. Especially as we are years away from a digital euro or dollar,” Moya stated. “It looks like bitcoin won’t really attract massive inflows. Until investors believe most major central banks are nearing the end of their tightening cycles.”

He speculated that giant coin prices will possibly remain choppy this summer. 

Featured image from Pixabay and chart from TradingView.com

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