The recent surge in inflows into spot Bitcoin (BTC) exchange-traded funds (ETFs) in the United States has raised concerns among analysts, who fear that it could lead to a repeat of history and a decline in Bitcoin’s price.
In an analyst note dated October 23, Hyblock Capital CEO and co-founder Shubh Varma expressed his opinion that this kind of activity has historically been followed by bearish price movements, and the current situation may be the beginning of a price dip. Varma highlighted the unusually large BTC ETF inflows in recent days, with inflows exceeding $300 million on multiple occasions.
According to Farsidedata, spot Bitcoin ETFs experienced a seven-day streak of inflows totaling around $2.68 billion between October 11 and 21, before recording an outflow of $79.1 million on October 22. However, the inflows resumed on October 23, with total daily inflows of $192.4 million.
Interestingly, the last time there were significant inflows into spot Bitcoin ETFs, Bitcoin’s price dropped by 13% approximately three weeks later. On June 4 and 5, spot Bitcoin ETFs saw inflows of $886.6 million and $488.1 million, respectively, while Bitcoin was trading between $68,800 and $70,000. By June 25, just 20 days later, Bitcoin’s price had fallen to $60,266.
Varma suggests that if history repeats itself and Bitcoin’s price declines, analysts will be looking for large outflows in the spot Bitcoin ETFs. However, there are those who argue that the large inflows may indicate a supply shock on the horizon.
Pentosh1, the chief investment officer of North Node Capital and a Bitcoin supporter, stated on October 23 that a supply shock may be imminent. Market analyst Anup Dhungana also speculated that a supply shock is looming large.
Data from crypto exchange Deribit shows that Bitcoin options traders are hopeful that Bitcoin’s price will reach around $80,000 by the end of November, just three weeks after the US presidential election.
It is important to note that this article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct their own research before making any decisions.