GBTC Outflows Jump to $1.8 Billion This Week, BTC Price Enters Consolidation?

GBTC outflows refuse to stop with over $13.5 billion eroded already from its holdings. Analysts believe BTC price can correct to $51,000.
By Bhushan Akolkar

Highlights

  • GBTC outflows have put significant downward pressure on BTC price while inflow dry up.
  • Noob investors of Bitcoin ETFs make early exits, as per on-chain data.
  • This bull market correction can push the Bitcoin price to $51,000, says analyst.

The Grayscale Bitcoin ETF GBTC continues to bleed putting an overall dent on the Bitcoin ETF market. On Thursday, March 21, GBTC recorded yet another day of major outflows at $359 million. With this, the total outflows from the Grayscale Bitcoin fund have skyrocketed to $1.8 billion for this week. after a strong bounce back on Wednesday after the FOMC meeting, the Bitcoin price has once again entered consolidation.

The GBTC Outflows Create Price Pressure

After a strong start to March 2024, the Bitcoin ETF outflows have accelerated this week! On Thursday, March 21, the next outflows stood at $95 million as per data from Farside investors. While GBTC registered $358 million of net outflows, the BlackRock Bitcoin ETF IBIT registered $233 million of net inflows.

Renowned Bitcoin analyst Willy Woo has shed light on a notable discrepancy between exchange-traded funds (ETFs) and self-custody investors amid recent market fluctuations. Woo’s analysis reveals a significant disparity in investment behavior during the market downturn, particularly concerning outflows from ETFs and net inflows into the Bitcoin network.

During the initial dip, ETF investors exhibited a reactionary stance, withdrawing approximately $1.6 billion from ETFs. In contrast, the Bitcoin network witnessed total net inflows of $1.1 billion, indicating a substantial influx of capital from self-custody investors.

On the other hand, some market analysts continue to be bullish about Bitcoin ETFs noting that the GBTc outflow is a temporary phenomenon. These analysts believe that institutional buying has just begun and that more than $100 billion in Bitcoin ETFs could come over the next 1-2 years.

Will Bitcoin ETF Demand Recover?

CryptoQuant CEO Ki Young Ju states that the current deceleration in Bitcoin spot ETF netflows indicates a slowdown in demand for these investment vehicles. However, he suggests that this trend could potentially reverse if the price of Bitcoin approaches critical support levels.

Further insights provided by Ju highlight the behavior of new whales in the market, particularly those identified as ETF buyers. These new entrants have established a $56,000 on-chain cost basis, potentially influencing market dynamics.

In assessing historical data, Ju noted that corrections in bull markets typically entail a maximum drawdown of approximately 30%. Additionally, he identifies a maximum pain point of $51,000, suggesting a threshold at which market sentiment may shift significantly. Data from JPMorgan also suggests that Bitcoin is currently in the ‘overbought’ category and expects healthy correction ahead.

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Bhushan Akolkar
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
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