Bitcoin slips to $41,000 level due to heavy ETF outflows

Crypto market overview: The crypto market has seen a sharp decline in the last 24 hours with Bitcoin falling close to 3.5 per cent to reach its lowest level of the month. Other altcoins including Ethereum, XRP, Cardano, Solana, fell significantly due to heavy liquidations in the market. 

The Crypto Fear and Greed Index also reflected the fear sentiment in the market after falling by 12 points in a single day. Currently the index hovers in a neutral zone with 51 points. 

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Sharing the market overview in the last 24 hours, the CoinDCX market research team told Republic Business, “Over the past 24 hours, the crypto market witnessed a bearish trend, with a decline of over 3 per cent. Both BTC and ETH were affected, possibly due to the waning enthusiasm around the BTC ETF and profit-taking. Additionally, news emerged about the SEC postponing the decision on Fidelity's ETH spot ETF. From a technical standpoint, BTC faces a critical challenge in maintaining the current support at $41,000. A breach below this level might signal a bearish sentiment, while a successful hold could pave the way for a continuation of a new higher high.” 

“As for ETH, it remains positioned above the 20 EMA daily. To sustain a positive trajectory, ETH needs to stay above $2,400, as dropping below this level could introduce a bearish turn,” CoinDCX added. 

Sharing the breakout prospects of Bitcoin, Rajagopal Menon, Vice President, WazirX, “The overall Crypto market is hovering around its support level which is a tricky state since breakouts above this could take its value over $2 trillion, but in case it fails to do so, the market cap could tumble further. Bitcoin’s support is being projected at $37,000 which is not an optimistic outlook. However, the market has tried to make the most of the ‘sell the news’ profit which led to the ETF, a move that wasn’t quite anticipated. The Bitcoin dominance decreased by -0.04 per cent in the last 24 hours, indicating a start to the alt season.” 

Underlining the market movement as an unexpected downturn, Shivam Thakral, CEO of BuyUcoin shared that the market’s downward trajectory is fuelled by heavy outflows from Exchange Traded Products to new spot ETFs. Thakral said, “For example, Blackrock’s Bitcoin ETF has accumulated $1 billion worth of Bitcoin in just one week, which means there is a heavy outflow of Bitcoin to such regulated ETFs. We can expect the Bitcoin price to rise once this transition cools down and investors are done with profit booking.”

Sell the news pressure

Parth Chaturvedi, Investments Lead, CoinSwitch Ventures said, “The crypto market has undergone selling pressure in the last 24 hours, with global market capitalisation falling by 3.5 per cent to just below $1.7 trillion. The top 30 cryptos by market years are currently trading in the red. BTC underwent ‘Sell the news’ pressure related to investor activity around the spot ETF approvals, leading to its lowest price in a month. We can expect some volatility in BTC’s price for some time. However, the ETF inflows and Assets under Management (AUM) continue to see healthy numbers.” 

“The newly launched spot BTC ETFs already have nearly $30 billion in AUM as compared to $11 billion for Silver ETFs. In another instance, BlackRock's Spot BTC ETF hit the $1 billion AUM, becoming the first of the recent group of BTC ETF providers to hit this milestone,” Chaturvedi added. 

Future outlook

Edul Patel CEO of Mudrex said, “Bitcoin dropped to $41,000, marking its first decline since December, driven by increased liquidations and a strong US dollar. Traders are actively seeking opportunities to accumulate below the $40,000 threshold. Despite the low market volume, BTC continues to trade above $42,000, registering a significant 96 per cent year-to-date gain. The market may experience some volatility as bears strive for dominance. However, if BTC can close above $43,700 resistance over the weekend we may see an uptrend.” 

Sharing the future outlook for the crypto market, Vikram Subburaj, CEO, Giottus said, “If BTC fails to bounce off $40,800 in the near term, a retracement to $40,000 is likely. Its 4-hour Stochastic and RSI are in tandem with price action indicating a change in market sentiment to bearish. The altcoin market has also experienced a dip, with Solana and Avalanche losing 7 per cent overnight.  Key support targets for altcoins today: Ethereum ($2,400), Solana ($86), BNB ($300), Avalanche ($30) and Cardano ($0.44).”