Bitcoin is ending the week with a significant bearish trend, following a massive crash that pushed the price below $66,000. This crash had a ripple effect on the entire crypto market as other digital assets also saw a decline in their prices. The root cause of this crash can be traced back to the sudden decrease in net inflows for Spot Bitcoin ETFs. Institutions, who were previously showing strong interest in these ETFs, seem to be scaling back on their buying activities.
Data from the aggregation platform Spot On Chain reveals that the net inflows into Spot BTC ETFs have dropped drastically in the past few days. The decline was first noticed on Wednesday, March 3, when daily net inflows experienced a 38% crash. Despite Wednesday being one of the days with the second-highest daily inflow, outflows started to increase simultaneously, leading to a decrease in net inflows. This downward trend continued on Thursday, March 14, with net inflows plunging by 80.6% compared to the previous day, which had already seen a 38% decline.
Although the ETFs are still experiencing positive inflows, the rising outflows could potentially have a negative impact on Bitcoin’s price. If the outflows continue to increase, Bitcoin may face severe repercussions, similar to the market crash triggered by outflows from the Grayscale Bitcoin Trust. Following the flash crash that brought the price down to $65,600, Bitcoin has been struggling to recover. Despite a surge in demand for BTC at lower prices, the price has only managed to reach $68,000 before facing resistance.
Currently, Bitcoin is hovering around $66,500, with $68,000 posing as the next significant resistance level. However, even if Bitcoin manages to surpass this hurdle, it will still need to contend with strong resistance at $68,700. The recent crash has caused Bitcoin’s price to drop by over 8% in a single day, resulting in a market cap of $1.33 billion. This downturn has also had negative implications for altcoins, with popular assets like Ethereum, Dogecoin, and Cardano experiencing an average decline of 10%.
As the crypto market continues to navigate through turbulent waters, investors are urged to exercise caution and conduct thorough research before making any investment decisions. The volatility in the market underscores the importance of staying informed and being prepared for sudden shifts in price and sentiment. Bitcoin’s resilience will be tested in the coming days as it strives to overcome the challenges posed by ETF outflows and market uncertainties.