Bitcoin is currently experiencing a downward trend in its price after suffering a significant crash last week. The crash, which saw the price drop below $66,000, has been attributed to a decrease in net inflows into Spot Bitcoin ETFs. Institutions, which have been driving the bull run in recent months, seem to be scaling back on their buying activities, leading to a reduction in daily net inflows into these ETFs.
Data from the platform Spot On Chain indicates that the daily net inflows into Spot Bitcoin ETFs have experienced a drastic decline over the past few days. On Wednesday, March 3, there was a 38% crash in daily net inflows, following the second-largest daily inflow for these ETFs. The trend continued on Thursday, March 14, with net inflows registering an 80.6% decline compared to the previous day, marking the worst trading day for ETFs in over a week.
Impact on Bitcoin Price
The decrease in net inflows has had a direct impact on the price of Bitcoin, causing it to plummet to $65,600 after the crash. While there was a temporary recovery as demand surged for BTC at lower prices, the price was soon rejected at $68,700. Currently, the price of Bitcoin hovers around $66,500, with significant resistance levels at $68,000 and $68,700.
The recent crash has seen Bitcoin’s market cap drop to $1.33 billion, representing an 8% decline in the last day. This downturn has also affected altcoins such as Ethereum, Dogecoin, and Cardano, which have experienced an average decline of 10% in their prices.
The decrease in net inflows into Spot Bitcoin ETFs has had a negative impact on the overall cryptocurrency market, with Bitcoin’s price suffering a significant decline. As institutions continue to scale back on their buying activities, it remains to be seen how Bitcoin will navigate through the challenges posed by the current market conditions. Investors are advised to conduct their own research and exercise caution when making investment decisions in such a volatile market.