Consolidation in the market - will lower ETF inflows follow?

Thought of the week

Grayscale’s offering cannot keep pace with the other Bitcoin spot ETF providers and so the outflows follow on a daily basis so that capital can be redeployed. This inevitably leads to a certain amount of selling pressure. If this continues, as is currently the case, the Grayscale Bitcoin Trust will disappear from the scene in ~90 days. In the medium term, this would ensure that Bitcoin inflows would no longer compete with outflows, making it easier for positivity to flow into the market.

Digital Asset News

Bitcoin may soon clear its “biggest hurdle” as GBTC capital outflows diminish, easing selling pressure from the leading fund. However, US Bitcoin spot index funds (ETFs) took centre stage this week for reasons to the contrary.
Capital inflows have recently fallen significantly compared to the beginning of the month, while capital outflows from the GBTC have reached record highs at the same time. This resulted in five days in a row in which an overall net outflow was recorded.
However, the timing of this development is not entirely coincidental, as rumours suggest that the insolvent crypto lender Genesis has recently sold considerable GBTC shares.
If these sales have now been completed, the selling pressure on ETFs could quickly ease again.
“Net outflows from Bitcoin ETFs fell to -$51.6m yesterday, led by a significant reduction in GBTC selling,” as investor Alistair Milne notes in this context.
“Many investors have been shaken out of the market and many are still waiting for further declines. At the current issuance rate, we would need just under USD 57.6 million in capital inflows per day at a price of USD 64,000 to buy up the coins mined daily. In less than a month, this sum will be reduced to USD 28.8 million.”

The chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, is once again firing back at the crypto industry, claiming that some market participants are deliberately circumventing the regulator’s registration requirements. The SEC chairman argued in favour of the benefits of mandatory disclosure for market participants and quoted Supreme Court Justice Louis Brandeis, who has said in the past that “sunlight is the best cure for blind spots.”
“There are still those who would like to erode the SEC’s disclosure rules,” the SEC chief said. He continued: “There are participants in the crypto markets who are trying to circumvent these registration requirements. No registration means no disclosure requirements. Many would agree that the crypto markets could use a little more sunlight.”
Gensler’s comments come at a time when the SEC has brought several prosecutions against major crypto companies, including Kraken, Binance, Ripple and Coinbase. However, many crypto companies and industry stakeholders have repeatedly called on the SEC to establish clear rules to keep innovation in the sector in the United States.
This clearly shows how regressive the SEC is acting and how immensely important it is to follow a regulated path, as Teroxx has done since the beginning and will continue to do!

During Bitcoin’s recent downturn, the Bitcoin spot ETF market has also been conspicuously weak of late. Despite the continued decline in net inflows, Ki Young Ju, prominent analyst and CEO of CryptoQuant, predicts a resurgence of Bitcoin spot ETFs in the near future.
In a post on X on 22 March, Ki Young Ju stated that net inflows into Bitcoin ETFs could soon increase again, even if the price decline continues. Using data from the Netflow Trends metric, the analyst noted that demand for Bitcoin ETFs usually picks up when the cryptocurrency reaches support levels.
It should be noted that ETF buyers, in particular, have an on-chain cost basis of around USD 56,000. This suggests that significant Bitcoin holders, particularly ETF investors, have currently purchased Bitcoin at an average price of USD 56,000.
In line with this pattern, the expert expects significant inflows into the Bitcoin ETF spot market should BTC reach the aforementioned price threshold.
Data shows that the Bitcoin bull cycle is probably not over yet, considering that investment flows from new investors are relatively low and price valuation metrics are still below the levels of past market highs.
Regardless, the upcoming Bitcoin halving is likely to be an important factor in boosting the BTC price.

Digital Asset Market

The majority of digital assets experienced a consolidation last week. This initially manifested itself in stronger sell-offs and setbacks of over 10% before a moderate recovery took place, resulting in the formation of support zones – a positive sign – but also highlighting the fact that the market immediately lacks catalysts for further gains in the event of lower Bitcoin spot ETF inflows. The current price levels can therefore only be justified in the long term by steady inflows with a certain volume. Added to this are the resurgent larger outflows from the Bitcoin Grayscale Trust, but these Bitcoins should all be sold within the next 90 days with the current sell-off, which will exert significantly less selling pressure on the market. Bitcoin spot ETFs will therefore remain the dominant theme when it comes to price developments in the coming weeks. Attention should always be paid to the daily inflow and outflow figures.
On a weekly basis, the overall market performance is thus around -1.4%.
For the coming week: High inflows could push Bitcoin back up towards $70,000, while comparatively high grayscale outflows could bring it closer to the support zones at ~$60,000.

Chart technology

From a chart technical perspective, Bitcoin is now in a trend channel between $70,000 and $60,000, “searching” for new long-term trends. A classic consolidation thus prevails, which ensures “healthy” market conditions and makes the coming movements easier to trade.
Momentum is crucial in the current phase. Should a volatile trend (positive or negative) emerge, it will be reinforced by many market participants jumping on board. This is because every major movement is currently interpreted as a trend reversal. Positive = new all-time highs. Negative = reversal of the trend and new local lows.

The next price targets in the event of a positive trend: ~$70,000, ~$73,000, ~$75,500

The next price targets in the event of a negative trend: ~$64,000, ~$62,000 ~$59,500

Trading idea

Trading trend confirmations could be a successful tool this week. Digital assets that have been “stuck” in a consolidation for some time tend to exit it with increased volatility.

Weekly overview

As usual, we are also providing detailed videos for those who want to delve deeper into the subject.


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