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Grayscale Bitcoin ETF Records $640 Million Outflows — BTC Price Under Pressure

Last Updated March 19, 2024 1:25 PM
Nikola Lazic
Last Updated March 19, 2024 1:25 PM
By Nikola Lazic
Verified by Peter Henn

Key Takeaways

  • Record $640 million outflow from Grayscale’s Bitcoin ETF affects the price of Bitcoin.
  • Analysts optimistic despite Bitcoin’s recent price drop.
  • Potential for significant Bitcoin price growth by 2025.

Grayscale’s Bitcoin ETF faced a record outflow of over $640 million on March 18, leading to Bitcoin (BTC) dropping below $65,000. This outflow, the largest since the fund’s transition to a spot ETF in January, coincided with a historic low inflow into Fidelity’s Bitcoin ETF, resulting in a net outflow of $154.3 million for the sector. 

This has contributed to a 9% decline in Bitcoin’s price in the last 24 hours as of March 19 2024. The cryptocurrency fell to $62,700 at its lowest point. This low concludes a 15% drop from its all-time high of $73,600, reached on March 13. It could even signal the start of a larger correction. 

Analysts Remain Optimistic

Farside Investors  market analysts point to slowing ETF flows, the upcoming Bitcoin halving, and an anticipated Federal Reserve meeting as factors pressuring Bitcoin’s price. Despite this, some industry experts remain optimistic about the future influx into Bitcoin ETFs.

Largest GBT outflow
Farside investors data on Bitcoin ETFs

Furthermore, Standard Chartered has raised its Bitcoin (BTC) price forecast, predicting a potential peak of $250,000 by 2025. This optimism is partly based on the analogy of the impact of gold ETFs on gold prices, suggesting the introduction of spot Bitcoin ETFs in the US could similarly propel Bitcoin’s value. The bank forecasts that with potential ETF inflows reaching $75 billion and possible purchases by reserve managers, Bitcoin could see substantial price growth in the medium term.

In a Bloomberg TV interview, Grant Engelbart from Carson Group noted that only a small number of the firm’s advisers had seen clients allocate to Bitcoin ETFs, averaging at 3.5% of total funds. Bloomberg analyst Eric Balchunas echoed this sentiment, saying only a few early adopters had allocated a significant portion to spot Bitcoin ETFs. He also mentioned that inbound interest drove current inflows, suggesting potential growth in Bitcoin ETF inflows.

Bitcoin (BTC) Price Analysis 

On March 13, 2024, Bitcoin peaked at $73,800. From February 26, Bitcoin’s price action formed an ascending triangle representing either an ending diagonal or a rising wedge. This signalled the potential conclusion of the upward trend and the likelihood of a reversal.

4-hour chart.
Bitcoin could be in a larger correction.

After it broke, it went on a downward trajectory below the ascending support line to a daily low of $62,600. 

This pattern marks the end of a prolonged uptrend that began in November 2022, potentially leading to a considerable correction if the downward momentum continues. The initial significant support level is expected to be around $52,600. However, there may be some short-term sideways trading as sellers dominate the market.

The Relative Strength Index (RSI) on the 4-hour chart is 29%, at the oversold territory. A slight recovery might occur, given the sharp decline, but the prevailing trend is shifting towards bearish.

To confirm a longer-term and more significant downturn, we must first see a lower high and a lower low. Such a development would indicate the beginning of a bearish trend in Bitcoin’s price. If it does, it could imply Bitcoin could be headed toward the $44,000. 

Disclaimers

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

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