Capital outflows from the Grayscale bitcoin ETF shook the market hard last week, causing a dramatic drop in the price of btc. However, with the new week, there has been a change of direction as investors begin to become bullish on bitcoin once again. As a result, capital outflows from the Grayscale ETF have slowed, reaching one of their lowest points of the month.
Grayscale bitcoin ETF Outflows Drop 60%
Grayscale outflows surged last week, leading what would turn out to be a full week of spot bitcoin ETF outflows for the first time. Departures increased rapidly throughout the week, even moving into the new week. However, spot bitcoin ETF inflows have been increasing, overshadowing GBTC outflows.
Even as GBTC outflows continue, it has begun to turn towards a more positive narrative as the amount of btc leaving the fund is rapidly declining. To put this in perspective, the data sample 299.8 btc was withdrawn from the fund on Wednesday, March 27, and on Thursday, March 20204, this figure fell to 104.9 btc, representing a 60% drop.
This marks the second-lowest outflow day for the Grayscale bitcoin ETF, just behind the 79 btc outflows on March 12. It also points to a decline in the volume of outflows as investors begin to stabilize and find their feet elsewhere.
However, GBTC remains the loser of the bitcoin Spot ETF race, with a full month of outflows so far. Since the ETFs were first approved in January until now, more than $14.6 billion has been withdrawn from the fund, representing about 50% of its total balance. These btc have presumably found a home in other spot ETF funds that have seen massive inflows.
Unlike last week, inflows have also dominated bitcoin spot ETFs this week. Total inflows for the week exceeded $800 million, bringing total assets under management (AuM) to nearly $57 billion in less than three months.
Why This Could Trigger a btc Price Rally
Last time GBTC outflows saw a slowdown after rising for about a week, it triggered a bitcoin price response in the form of a rally. Inflows also continued to dominate over the next few weeks and during this time, the btc price enjoyed a long period of recovery. It went from $40,000 to over $70,000 in the space of two months.
If this trend repeats itself this time, then another massive btc price rally could be around the corner. A similar price increase would also put bitcoin just above $100,000 in the coming months. In this case, the bullish trend would be far from over.
At the time of writing, bitcoin is still struggling to break above $70,000 after a 1% drop in the last day.
<img decoding="async" class="aligncenter size-medium" src="https://technicalterrence.com/wp-content/uploads/2024/03/Grayscale-Bitcoin-ETF-Sees-Drastic-60-Drop-in-Outflows-Why" alt="Tradingview.com bitcoin Price Chart” width=”3286″ height=”1530″ loading=”lazy”/>
btc price jumps above $70,000 | Source: BTCUSD on Tradingview.com
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