Bitcoin BTC Price Rebounds Amidst $742 Million ETF Outflows

Bitcoin’s price demonstrated remarkable resilience on Wednesday, surging by nearly 10% despite significant outflows from US-listed spot Bitcoin Exchange-Traded Funds (ETFs).

The cryptocurrency market, in general, has been upbeat, posting gains following the Federal Reserve’s two-day policy meeting, which maintained interest rates and hinted at potential rate cuts later in the year.

TLDR

Bitcoin’s price surged by nearly 10% on Wednesday, despite significant outflows from US-listed spot Bitcoin ETFs.
The Grayscale Bitcoin Trust (GBTC) and Invesco Galaxy Bitcoin ETF (BTCO) experienced the most substantial losses, with a total of $742 million in outflows this week.
Despite the ETF outflows, Bitcoin’s market performance has been resilient, with the cryptocurrency rebounding from a dip to $60,775 to a high of $68,100.
Federal Reserve Chair Jerome Powell’s dovish stance and the Fed’s maintained projection for three rate cuts this year have contributed to Bitcoin’s recovery.
Analysts suggest that the current Bitcoin bull cycle is far from over, as short-term holder investment and valuation metrics remain outside the typical market top zone.

Data from Farside Investors revealed that Bitcoin ETFs experienced a substantial withdrawal of approximately $742 million this week, with the Grayscale Bitcoin Trust (GBTC) and Invesco Galaxy Bitcoin ETF (BTCO) being the most affected. GBTC saw an outflow of $386.6 million, while BTCO lost $10.2 million.

Despite these hefty capital outflows, Bitcoin’s market performance remained strong, with the cryptocurrency rebounding from a dip to $60,775 to a high of $68,100 before settling at $66,640 during early Thursday trading.

The recovery in Bitcoin’s price occurred as Federal Reserve Chair Jerome Powell expressed a dovish stance, maintaining the Fed’s projection for three rate cuts this year, even amidst rising inflation.

This development highlights the complex relationship between institutional movements and cryptocurrency valuations, as Bitcoin’s robust demand has allowed it to withstand negative institutional pressures.

Analysts from CryptoQuant have provided a longer-term outlook, indicating that the current Bitcoin bull cycle is far from over. The firm’s data suggests that short-term holder investment comprises only 48% of total Bitcoin investment, a figure that historically reaches 84%-92% at the end of a bull cycle.

Furthermore, valuation metrics such as the CryptoQuant P&L Index remain outside the typical market top zone, maintaining a position above the 1-year moving average.

The broader cryptocurrency market also showed growth, with Ether rising by 1.2% to $3,379.43 on Wednesday, and other cryptocurrencies such as Matic, Solana, and Dogecoin posting gains.

Stocks connected to cryptocurrencies, including Coinbase, MicroStrategy, Iris Energy, CleanSpark, Riot Platforms, and Marathon Digital, also performed well.

Despite the recent downturn caused by short-term holders cashing out their BTC holdings and the subsequent liquidation of long positions on margin trading platforms, experts believe that such pullbacks are a normal occurrence in Bitcoin bull markets.

However, they caution that a drop below the $60,000 mark could signal a more significant downturn, potentially testing the $50,000 to $52,000 range.