Bitcoin Investment Products Record Fourth Week of Net Outflows, What’s Next?

As per the latest report from CoinShares, cryptocurrency investment products witnessed a fourth consecutive week of outflows totaling $251 million. A large of it was through the outflows in the spot Bitcoin ETFs that turned out to be $156 million.

According to CoinShares, the average purchase price of these ETFs since their inception is estimated to be around $62,200 per Bitcoin. With the price dropping by 10% below this level, it may have activated automatic sell orders. However, after the last week of outflows, Bitcoin ETF flows have turned net positive in the last two trading sessions once again. The surprising thing is that Grayscale’s GBTC has been registering net inflows for two consecutive days in a row.

Breaking down the net flows taking place across digital assets, Bitcoin alone saw net outflows of $284 million. Interestingly, Bitcoin was the only digital asset to register net outflows. On the other hand, Ethereum (ETH) broke its 7-week spell of outflows while registering $30 million in inflows last week.

Various altcoins experienced inflows, with notable amounts observed in Avalanche, Cardano, and Polkadot, receiving $0.5 million, $0.4 million, and $0.3 million, respectively. The bright spot as per CoinShares was the launch of the Hong Kong Bitcoin and Ethereum ETFs, which clocked more than $307 million in net inflows during the first week.

Bitcoin Price Action

After slipping all the way to $57,000 last week, Bitcoin (BTC) price bounced back as the jobless data came higher than expected leading to anticipation that the Fed could announce rate cuts sooner than expected. This would mean greater liquidity inflows into the market ultimately benefitting risk-ON assets like stocks and cryptocurrencies.

As of press time, Bitcoin is now trading at $63,360 levels with a market cap of $1.245 trillion. Crypto analyst Michael van de Poppe is anticipating a continuation within the current range. He emphasizes the importance of the $60.5K level, stating that if it holds, there’s a probable chance of a continuation towards $70K within the next 1-2 months.

#Bitcoin looking for continuation within this range.

Crucial level for me is the $60.5K level.

If that holds, then there’s a likely chance of continuation to $70K in the upcoming 1-2 months. pic.twitter.com/8LBYOrPnyB

— Michaël van de Poppe (@CryptoMichNL) May 7, 2024

The recent upward momentum in Bitcoin (BTC) price has prompted options traders to reassess the likelihood of the cryptocurrency reaching the $100,000 mark at some stage this year.

Consequently, there has been a marked uptick in the demand for bitcoin call options on prominent cryptocurrency exchange Deribit and over-the-counter (OTC) networks. These options are specifically aiming for a surge to fresh highs, potentially surpassing $75,000 and even hitting $100,000.

“We are seeing some bullish follow-through in volatility and rates following the reversal bounce from Friday and into the weekend. BTC risk reversals have gone positive (calls more expensive than puts), and [there has been a] renewed demand for BTC Sep expiry $75,000 and $100,000 call,” QCP Capital said in a note to investors on Monday.

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