Bitcoin investors are selling heavily as prices approach critical levels, with US spot-Bitcoin ETFs experiencing their ninth-largest weekly outflow since early 2024. According to K33 Research, $1.7 billion exited funds in the five days through Monday as Bitcoin neared $83,000, a price level where ETF holders are roughly flat on their investment.
K33 Research tested the impact of Bitcoin's proximity to this price level on outflows and found that when Bitcoin trades near the price most ETF investors paid, the likelihood of a heavy outflow day rises to over 10%, compared to just 3% when prices are higher. This behavior is attributed to market participants seeking to avoid losses.
The $83,000 level is also significant as it aligns with Bitcoin's 200-day moving average, a threshold that has historically acted as a resistance point. Analysts at CryptoQuant have identified this as a 'key bear market ceiling,' noting similar patterns in March 2022.
“In other words, heavy outflow days are far more common when BTCUSD trades close to its cost basis.”
Vetle Lunde, Head of Research at K33
Bitcoin's broader momentum has been waning, with the cryptocurrency trading around $77,600, far below its all-time highs of over $126,000. Retail investors have been exiting, and institutional flows have thinned, leaving the market caught between a large mechanical buyer and a tendency to sell into any recovery.
K33's data also revealed that institutional participants reduced their Bitcoin ETF exposure by 26,733 tokens in the first quarter, while retail investors added 19,395 tokens. This reduction was largely driven by funds like Millennium and Jane Street, attributed to compressing crypto yields and opportunities elsewhere.
Background
Bitcoin has experienced significant volatility over the years, with its price movements closely watched by both retail and institutional investors. The introduction of Bitcoin ETFs was seen as a bridge to mainstream finance, but recent trends indicate challenges in maintaining investor interest.
The continued outflows highlight the challenges Bitcoin faces in sustaining momentum. Investors and analysts will be watching closely to see if the cryptocurrency can break through its current resistance levels or if further selling pressure will prevail.
