Summary
- The 7-day simple moving average (SMA) of US spot Bitcoin ETF netflows fell to -$88 million per day, marking the highest outflow since mid-February, according to Glassnode.
- The yield on 10-year Treasury notes reached 4.52%, while the April Consumer Price Index (CPI) hit 3.8% year-over-year, the highest level in three years, leading to postponed expectations for a Federal Reserve rate cut.
- Analysts identify $77,000 as the crucial support level; if breached, alongside elevated open interest, a deleveraging phase may ensue.
Bitcoin is currently struggling to maintain its position above $80,000 as institutional investors withdraw from ETFs in response to rising Treasury yields, despite the CLARITY Act’s passage through the Senate Banking Committee.
As reported by CoinGecko, the leading cryptocurrency increased by 0.8% in 24 hours, trading at approximately $80,350 after several failed attempts to breach the $82,000 resistance zone, which includes the cost basis for ETFs, the 200-day moving average, and a now-fulfilled CME gap.
The 7-day SMA of U.S. Spot ETF netflows saw a decline to -$88 million daily, the largest outflow since mid-February, as alerted by Glassnode. Analysts noted that this outflow represents institutional investors selling into strength rather than responding to fear.
Reasons for Institutional Selling
The outflows represent opportunistic profit-taking and portfolio adjustments instead of a hasty exit, suggested Tim Sun, a senior researcher at HashKey Group. He mentioned that funding rates are relatively moderate, and long/short ratios aren’t at extreme levels.
Alex Tsepaev, Chief Strategy Officer at B2PRIME Group, concurred that demand quality appears to have diminished due to high Treasury yields and changing market dynamics. He anticipates minimal to no Fed rate cuts this year, with just one potential cut later in the year if inflation trends downwards.
Currently, market predictions suggest an 88% chance for Bitcoin to rally to $84,000 rather than drop to $55,000, despite analysts noting that the $82,000 to $84,000 range remains a significant resistance zone.
Ultimately, Bitcoin’s ability to stay above $77,000 will dictate whether the outflows manifest as a temporary challenge or result in more severe consequences, according to both Sun and Tsepaev.
