Bitcoin Dips Below $86,500 Despite ETF Inflow Streak

Key moments

BTC Declines Amidst ETF Market’s Positive Turnaround

Bitcoin’s price receded by 1.21% on Tuesday, falling below $86,500, following Monday’s surge. This fluctuation occurred against a backdrop of significant on-chain activity and evolving market sentiment.

A notable factor influencing market dynamics was the movement of substantial Bitcoin holdings by Mt. Gox, which used to operate as an exchange in the Japanese market before filing for bankruptcy. Analysis by Arkham Intelligence showed Mt. Gox relocated 893 Bitcoins to its hot wallet. Another 10,608 Bitcoins (valued at $927.48 million) were transferred to a designated change wallet. Such large-scale transfers often trigger investor apprehension due to the potential for market saturation through subsequent sell-offs, although the market’s reaction was relatively mild this time.

In contrast to Bitcoin’s drop in value, the U.S. spot Bitcoin ETF market displayed robust investor engagement. After enduring a five-week period of net outflows, Bitcoin ETFs registered a significant turnaround, achieving a net weekly inflow of $744.35 million last week. The majority of Bitcoin ETF inflows came from two funds: BlackRock’s IBIT, which received $537.5 million, and Fidelity’s FBTC, which saw $136.5 million in inflows.

The positive sentiment persisted, with further inflows reported on Monday and Tuesday. Notably, BlackRock’s IBIT documented a daily inflow of $18.1 million, as reported by Farside Investors, indicating consistent institutional interest.

The resurgence in ETF inflows signaled a positive shift in market sentiment, with institutions demonstrating a renewed commitment to Bitcoin. However, the overall trading activity surrounding Bitcoin underscored the volatile nature of the cryptocurrency market, where large-scale on-chain movements and price decreases could coincide with significant institutional interest. Despite the temporary price dip, the perceived trend of growing institutional presence could potentially stabilize and support Bitcoin’s price in the long term.