The recently debuted spot Bitcoin ETFs faced net outflows totaling $888 million from March 18 to March 22, marking a significant shift from the previous week’s $2.57 billion inflow. This development raises questions about the sustainability of Bitcoin’s surge to $70,000 on March 25.
Bitcoin’s Rally Independent of Spot BTC ETF Inflows
Some had attributed Bitcoin’s record high of $73,755 on March 14 to institutional inflows, sparking doubts about the 9% gains observed between March 23 and March 25, especially considering the S&P 500 index’s failure to maintain its peak of 5,260 on March 21.
Analyst venturefoundΞr suggested on March 20 that Bitcoin faced a reality check post-FOMO from ETF investors, potentially trapping those who bought at the peak. However, despite a 15% gain from March 20 to March 25, Bitcoin’s market behavior implies its bullish momentum isn’t solely reliant on spot ETF inflows.
Some traders view the recent approval of a $1.2 trillion spending package by the U.S. on March 23 as a significant positive catalyst for Bitcoin. Additionally, with the Federal Reserve forecasting three interest rate cuts in 2024 and the U.S. deficit expected to reach $1.6 trillion, pressure on government debt repayment intensifies, heightening interest in Bitcoin.
Data from Bitcoin derivatives markets suggests resilience in price despite spot ETF outflows. The BTC futures premium remains largely unaffected, with an 18% level viewed optimistically, indicating buyers’ willingness to pay a premium for leveraged long positions. Similarly, the BTC options market shows a neutral stance, with no signs of panic even as Bitcoin tested the $62,000 support on March 20.
