- Spot Bitcoin ETFs recorded $648.64 million in outflows on Monday, with BlackRock‘s IBIT leading at $448 million.
- Analysts link the capital flight to U.S.-Iran geopolitical tensions and shifting expectations for Federal Reserve interest rate hikes.
- Despite a 6.7% price drop and “Extreme Fear” sentiment, Bitcoin’s funding rates turned positive and long-term holders continue to accumulate.
- Market prediction platform Myriad users assign a 77% chance for Bitcoin to rally to $84,000.
Spot Bitcoin exchange-traded funds faced significant pressure this week as institutional investors withdrew nearly $650 million on Monday alone, according to SoSoValue. The sell-off, led by BlackRock‘s IBIT, followed last week’s $1 billion in outflows and contributed to Bitcoin’s 6.7% slide to around $76,680.
Consequently, the Crypto Fear and Greed Index has dropped to 25, indicating “Extreme Fear” among investors. Agne Linge, an advisor at Wefi, told Decrypt that the outflows are “correlated to the general market and reflect the de-risking strategy… in light of geopolitical events.”
However, Illia Otychenko of CEX.IO suggested the primary driver was last week’s U.S. inflation data, which reshaped Federal Reserve policy expectations. On the prediction market Myriad, users place just a 2% chance on a rate cut in June.
Despite the bearish sentiment, several structural factors could cushion further downside. Bitcoin’s aggregated open interest remains elevated by historical standards at $26 billion, according to CryptoQuant data.
Moreover, Bitcoin’s funding rates have flipped positive after a prolonged negative streak. Otychenko emphasized that long-term holders have been accumulating BTC for months, which is “limiting Bitcoin’s downside potential.”
Myriad users remain optimistic, placing a 77% chance that Bitcoin’s next major move will pump it to $84,000. This long-term conviction persists despite the recent volatility and price correction.
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