Spot Bitcoin (BTC) exchange-traded funds (ETFs) within the United States have grabbed a significant amount of inflows in recent times, and analysts are concerned that it may lead to history repeating and Bitcoin’s price sliding.
“Historically, this kind of activity has been followed by bearish price movements, and we may be seeing the beginning of a price dip as a result,” Hyblock Capital CEO and co-founder Shubh Varma opined in an Oct. 23 analyst note viewed by Cointelegraph.
Large spot Bitcoin ETF inflows ignite worries
Varma pointed out that “there have been unusually large BTC ETF inflows over the past several days, with inflows exceeding $300 million on multiple occasions.”
Between Oct. 11 and 21, spot Bitcoin ETFs saw a seven-day streak of inflows totaling around $2.68 billion before clocking an outflow day of $79.1 million on Oct. 22, according to Farside data.
Oct. 23 resumed recording inflows, with total daily inflows of $192.4 million.
Spot Bitcoin ETFs have seen cumulative flows of around $21.41 billion since the January launch. Source: Farside
The last time there were “unusually” large inflows into spot Bitcoin ETFs, Bitcoin’s price dropped 13% around three weeks later.
On June 4 and 5, spot Bitcoin ETFs saw inflows of $886.6 million and $488.1 million, respectively, while Bitcoin traded between $68,800 and $70,000.
By June 25, just 20 days later, Bitcoin’s price fell to $60,266.
Related: Bitcoin’s repeating bearish engulfing trend and spot ETF outflows boost odds of sub-$60K BTC
Analysts say “supply shock” is on the horizon
Varma claimed that if history does repeat and Bitcoin declines, analysts will “want” to see “large outflows” in the spot Bitcoin ETFs:
“This could establish a higher low, setting Bitcoin up for a potential run to new all-time highs.”
However, other analysts argue the large amount of inflows may be a sign that a supply shock may be on the horizon.
North Node Capital chief investment officer and Bitcoin supporter Pentosh1 stated in an Oct. 23 X post:
“The BTC ETFs are buying far more Bitcoin than is being mined every day and it’s not even close the past 12 days. When supply shock? When sellers out of coins?”
Market analyst Anup Dhungana speculated that a “supply shock looms large.”
Meanwhile, data from crypto exchange Deribit shows that Bitcoin options traders are hopeful Bitcoin’s price will have reached around $80,000 by the end of November, just three weeks after the US presidential election.
Magazine: The rise of Mert Mumtaz: ‘I probably FUD Solana the most out of anybody’
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.