Trusted editorial content reviewed by leading industry experts and experienced editors. Ad Disclosure
Over the past week, Bitcoin saw an intense move as prices fell sharply from around $84,000 to around $60,000, marking one in every of the biggest weekly declines in the present market. Recent market data shows that the value of Bitcoin is currently barely as much as around $70,000, indicating some resilience out there.
Institutions are retreating: Bitcoin risk stays within the red despite recovery
According to a CryptoQuant analyst, Amr Taha, recent on-chain and institutional flow data signals risk aversion towards Bitcoin's price motion as various classes of investors proceed to scale back their market exposure. This cautionary data comes from three key metrics, exchange-traded fund (ETF) outflows, which reflect Bitcoin's institutional behavior UTXO exchange inflow, and the multi-asset inflow on the Binance exchange.
In general, positive net inflows into Bitcoin spot ETFs are a bullish situation, indicating increasing buying pressure from US institutional investors. However, recent developments paint an opposite situation as withdrawals are increasing, especially from BlackRock's IBIT, the dominant player out there.
Source: CryptoQuant
Analyst Amr Taha stated that IBIT experienced massive outflows twice within the last week. The first event occurred on February 2nd when investors redeemed $4.7 billion, after which on the fifth with $7.7 billion, bringing the entire to over $12.4 billion. Additionally, Grayscale's GBTC is alleged to have experienced an outflow of $2.1 billion during this era.
Stock market activity increases risk appetite
Using UTXO Exchange Inflow SMA 7D data, Ama Taha also pointed to a rise in Bitcoin inflows to exchanges over the week. On February 4th, BTC exchange inflows for Shark/Dophlin wallets reached over 14,900 BTC before increasing to twenty,800 BTC the next day. This was the primary time this indicator reached 22,800 since October, when BTC traded above $122,000.
However, as many Bitcoins have been sent to exchanges, stablecoins reminiscent of USDT are being withdrawn. On February 5, data on inflows on the Binance exchange showed that Bitcoin net inflows increased to $727 million, reaching levels last seen in mid-November. Meanwhile, USDT saw negative net inflows totaling around $450 million.
These developments show that institutions are reducing their holdings while retail investors are also exiting, making a “risk-off” environment that favors safety in a really cautious market. While this doesn’t confirm one other market downturn, it does indicate a prevailing, strongly bearish sentiment among the many investor classes. At press time, the leading cryptocurrency is trading at $68,513 after falling 15.94% over the past seven days.
BTC is trading at $68,374 on the every day chart | Source: BTCUSDT chart on Tradingview.com
Featured image from Pexels, chart from Tradingview
Editorial process At Bitcoinist, the main focus is on providing thoroughly researched, accurate, and unbiased content. We maintain strict sourcing standards and each page is rigorously reviewed by our team of top technology experts and experienced editors. This process ensures the integrity, relevance and value of our content to our readers.
