Record-Setting $1.2B Exodus from Bitcoin ETF in Three Days - Post-Withdrawal Scenario
Bitcoin ETF Exodus: $1.21B Drain as Activity, Valuation Deteriorate
Hit $105K, but is a correction on the way?
By Renuka Tahelyani
Bitcoin ETFs have seen a massive exodus, with $1.21 billion leaving in just three days - the largest capital flight since mid-March. But are Bitcoin's network fundamentals strong enough to counter the fear?
Network Activity Picks Up
Despite the sell-off, on-chain data indicates a surge in Bitcoin's network activity. Active Addresses increased by 22.66% over the past week, while New Addresses climbed by 11.94%. Zero Balance Addresses skyrocketed 53.41%, hinting at renewed retail interest or market rotation. However, these signals may not be enough to outweigh ETF redemptions if they don't lead to consistent demand pressure at higher prices.
Valuation Models Weaken
Multiple long-view valuation signals have weakened. The NVT Golden Cross dropped 53%, indicating low transaction volume relative to market cap. At the same time, the S2F Ratio plummeted 50%, casting doubt on Bitcoin's long-term scarcity model. While these declines don't signal an immediate downside, they often foreshadow local tops, especially when conviction weakens across multiple metrics.
Investors Under Pressure
UTXO data showed that 98.56% of outputs remain in profit, indicating long-term holders are still in good standing. However, the number of UTXOs in loss jumped by 25.46%, showing new or recent buyers are increasingly underwater. This divergence suggests that long-term holders are fine, but short-term participants may feel pressure. If these new entrants capitulate, it could trigger a broader correction.
Meanwhile, Miner Netflow Total dropped 7.52%, signaling a growing preference for sending coins to exchanges rather than holding them. This miner activity, often a pre-distribution signal, aligns with broader weakening trends in ETFs and valuation metrics.
Hanging Above $105K
Currently, Bitcoin is trading at $105,537, logging a 0.56% intraday gain. However, the price has already broken below a key trendline support. With ATR falling to 2,602, volatility is compressing, typically a precursor to larger directional moves. Unless bulls reclaim $108,000 resistance soon, the asset risks revisiting deeper support levels around $103,000 or below, especially if ETF outflows continue.
In light of the €1.21B ETF outflow streak, institutional hesitation aligns with weakening valuation models and consistent miner exits. While network activity remains strong, it may not be enough to override macro fear. If Bitcoin fails to recover above key resistance levels and institutional appetite doesn't return, this consolidation could evolve into a broader trend reversal.
[1] Cointelegraph[2] Bloomberg[3] Yahoo Finance[4] Investopedia[5] CNBC
- While the Bitcoin ETFs are experiencing a significant $1.21 billion outflow, on-chain data indicates a surge in Bitcoin's network activity, suggesting that the network's health is not entirely weakened.
- Despite a drop of 53% in the NVT Golden Cross and a 50% plummet in the S2F Ratio, indicating weakening valuation signals, the resilience of long-term holders could potentially counteract these declines to some extent.
- The rise in Zero Balance Addresses hints at renewed retail interest or market rotation, but the growth in UTXOs in loss among new or recent buyers highlights the pressure that short-term participants may be feeling.
- In light of the ETF outflows, the growing preference for sending coins to exchanges instead of holding, and the consistent miner exits, institutional hesitation aligns with weakening valuation models.
- As Bitcoin trades above $105K, remember that the price has already broken below a key trendline support, and unless bulls reclaim the $108,000 resistance soon, the asset could revisit deeper support levels, especially as the ETF outflows continue. This consolidation trend amid the bleeding ETFs, weakening valuation models, and persistent miner exits could potentially evolution into a broader trend reversal, hinting towards a correction in the future.
