Bitcoin ETF apathy is pressuring a key Bitcoin support level
Without Bitcoin ETF holding sustained inflows, Bitcoin could succumb to “demand side fragility,” analysts from Bitfinex warn.
Bitcoin is at risk of breaking a crucial support price level as US-based spot Bitcoin ETFs have continued to bleed red after the recent crypto market crash, according to analysts from Bitfinex.
“The lack of institutional accumulation has made the $107,000 to $108,000 zone increasingly difficult to defend as support,” Bitfinex analysts said in a report on Tuesday, noting significant net outflows after US President Donald Trump’s tariff announcement earlier this month.
Between Oct. 13 and Oct. 17, spot Bitcoin (BTC) ETFs saw around $1.23 billion in net outflows, according to Farside.
The Bitfinex analysts said the data “underscores the current absence of meaningful dip-buying from institutional investors.”
This week has seen outflows on two of three trading days; however, strong inflows on Tuesday have kept overall net flows positive so far at $335.4 million.
Bitcoin ETF performance mimics broader financial market
Bitcoin is trading at $108,864 at the time of writing, according to CoinMarketCap, after briefly surging above $113,000 earlier in the week before quickly retracing back below $110,000 again.
Bitfinex analysts said Bitcoin’s price is at a crucial point where it may “serve as a key warning signal” of a more prolonged consolidation period if it moves any lower.
Related: Bitcoin ETFs kickstart ‘Uptober’ with $3.2B in second-best week on record
The analysts said that this may happen if ETF inflows don’t hold strong. “If weakness persists or ETF inflows fail to recover meaningfully in the coming weeks, it would point to growing demand-side fragility,” the analysts explained, adding:
“Such a scenario could undermine one of the primary forces behind previous rallies —consistent institutional accumulation, heightening the risk of a more prolonged consolidation phase.”
However, the consensus among market participants is that Bitcoin will see an upswing before the end of the year, with the likes of BitMEX co-founder Arthur Hayes and BitMine chair Tom Lee still predicting Bitcoin could reach $250,000 by year-end.
Galaxy Digital CEO Mike Novogratz poured some cold water on this on Tuesday however, saying that a number of “crazy stuff” would have to happen for this to take place.
In a worst-case scenario, Bitcoin should still hold above $100,000 this year, he said.
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