Bitcoin ETF Interest May Surge Amid Price Declines

Ki Young Ju, the CEO of CryptoQuant, has indicated that the market for spot Bitcoin exchange-traded funds (ETFs) could see a revival if Bitcoin’s (BTC) price continues to fall. In a recent post on X, dated March 22, he suggested that the netflows of spot Bitcoin ETFs might increase as the price of BTC decreases. He based his prediction on historical net flow trends, which show that demand for Bitcoin ETFs typically rises when the cryptocurrency hits certain support levels.

According to BitMEX Research, a notable analytics firm, spot BTC ETFs have experienced negative net flows for the past four trading sessions. This trend is marked by continuous outflows from the Grayscale Bitcoin Trust ETF and reduced inflows to other BTC ETFs.

Exploring the Potential Revival of the Spot Bitcoin ETF Market

Ki Young Ju also noted that new BTC whales, particularly those investing in ETFs, have an average on-chain cost basis of around $56,000. He anticipates a significant resurgence in capital inflows into the ETFs if Bitcoin’s price drops to this level.

The price of BTC has been fluctuating between $62,000 and $68,000 over the past week. Young Ju suggests that a further price drop is possible, given that corrections usually see a maximum decline of about 30%, which could bring Bitcoin down to around $51,000 from its recent all-time high of $73,750.

#Bitcoin spot ETF netflows are slowing.

Demand may rebound if the $BTC price approaches critical support levels.

New whales, mainly ETF buyers, have a $56K on-chain cost basis. Corrections typically entail a max drawdown of around 30% in bull markets, with a max pain of $51K. pic.twitter.com/vZCG4F0Gh5

— Ki Young Ju (@ki_young_ju) March 22, 2024

Analysts have attributed Bitcoin’s recent correction to overheated market conditions, referring to it as a “pre-halving retrace” in anticipation of the upcoming Bitcoin halving event in April.

A recent report from CryptoQuant suggests that the Bitcoin bull cycle is far from over. This is based on the relatively low level of investment flows from new investors and price valuation metrics that are still below levels observed in previous market peaks.

Historically, the Bitcoin halving event has been a major catalyst for the BTC price, typically leading to a parabolic uptrend.

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