Bitcoin has recently seen a shift in its Spot ETF flows, with positive inflows being recorded on Wednesday following a period of consistent outflows since 8 January. This change in ETF flows has brought to light some intriguing findings regarding their impact on the overall market.
While Bitcoin’s price movement has historically been closely correlated with Spot ETF flows, the relationship has shown signs of divergence in recent times. Despite Bitcoin experiencing a significant 12.81% price increase earlier this week, reaching a local high of $100,175 on Wednesday, Spot ETFs continued to record negative flows in the days leading up to this surge.
The divergence between Bitcoin’s price rally and the outflows in Spot ETFs underscores a notable decoupling of these two factors, a trend that could potentially persist in the coming days.
On 15 January, Bitcoin Spot ETF flows registered $755.1 million in inflows, marking the third-highest daily inflows for the month thus far.
However, it is important to note that despite these positive inflows, Bitcoin experienced a slight decline of over 1.5% in the last 24 hours.
Bitcoin’s Focus on Short-Term Wedge Pattern Amidst Subdued Market Activity
As of the current writing, Bitcoin is being traded at $99,236, with indications pointing towards a possible downside correction.
One factor contributing to this potential downside is the recent price uptick in Bitcoin, which tested a descending resistance line and faced some selling pressure in the past 24 hours, signifying the resilience of the resistance level.
Furthermore, on-chain data suggests that Bitcoin has been witnessing outflows in the spot segment, with $156.01 million of spot outflows reported in the last day alone.
The increase in spot outflows indicates a focus on short-term profit-taking among investors, providing insights into the current demand sentiment, which appears less bullish in the short term.
Whale activity also aligns with this short-term sentiment, with recent data showing 1,420 BTC inflows from large holders on Wednesday, compared to 494 BTC outflows during the same period. While whale demand has been strong, overall market demand remains relatively subdued compared to previous spikes seen in December.
Low participation from whales suggests a lack of confidence in the market’s stability, possibly limiting Bitcoin to short-term fluctuations and leading to a potential retreat from the resistance level. However, investors should stay vigilant for any significant developments that could sway market dynamics.