- Bitcoin slips from $64k to $62k at press time amid a daily total net outflow of $217 million of the US listed Exchange Traded Funds (ETFs).
- An analyst believes that there could be a bearish extension that could send the BTC price to as low as $59k once it falls below $63.3k.
The Bitcoin (BTC) price has remained relatively stable after the halving event, holding strongly above $60k and rotating within the $62k-67k amid the unprecedented outflows of the three-month-old US spot Bitcoin ETFs. At press time, the asset had plunged below the $64k recorded in the early afternoon of East Asia’s trading day to peg at $62.9K after declining by 2% in the last 24 hours and 10% in the last 30 days.
Interestingly, this coincides with the daily total net outflow of the US-listed ETFs which is currently around $217 million, extending the total outflows for this week to $244.49 million. This also encompasses the $23 million drawdown for the Fidelity Wise Origin Bitcoin Fund reportedly to be the first since January 11. Grayscale alone recorded an outflow of $417 million last week in addition to a 72-day record of withdrawals as reported by Crypto News Flash.
The reason has been linked to the US inflation data suggesting higher-for-longer borrowing costs improving Treasury yields and negatively affecting speculative assets like crypto.
Noelle Acheson, author of the Crypto “Is Macro Now” newsletter commented on this:
Bottom line, we can expect BTC to take a breather as long as the macro mood continues to support higher yields.
Correlation Between Bitcoin ETF Prices and Inflows Weakens
With these prolonged outflows, JPMorgan has also observed a weakening correlation between Bitcoin ETF prices and inflows. In January, the correlation was around 0.84, however, it had dropped to 0.60 in a recent assessment. Explaining this is analyst Ken Worthington who believes that a reading above 0.70 indicates a higher correlation while a number just below it is considered “moderately correlated”.
With all of these happening, liquidations have in the last 24 hours hit $60 million with BTC contributing $13.48 million. Out of this, $6.17 million longs were liquidated while $7 million shorts were also liquidated. While investors hope that the market could bounce back to bullish ways, an analyst known as RektCapital has predicted another downturn within the next two weeks. RektCapital compared the ongoing correction to the pullback witnessed in 2016. Per his observation, Bitcoin usually experiences two corrective waves – one before the halving, and one after the halving.
If we think about the pre-halving danger zone [now], we need to also potentially factor in or at least consider a potential danger zone after the halving – so, a second danger zone.
Regardless, Bitcoin is expected to strongly hold above $60k in the next two weeks while remaining above the post-halving danger zone until next month. Confirming this is Ali Martinez who has also observed a sell signal on BTC’s 12-hour chart. According to him, Bitcoin could fall to 61k and $59k once it falls below $63.3k.
Two sell signals were presented on the #Bitcoin 12-hour chart: A death cross between the 50 and 100 SMA and a red 9 candlestick from the TD Sequential. If $BTC falls below $63,300, brace for possible dives to $61,000 or even $59,000.
