Bitcoin’s decline prompts caution among traditional investors, emphasizing the importance of forthcoming flow data to gauge market sentiment.
Traditional investors (tradfi) are starting to exercise caution as Bitcoin’s (BTC) price experiences a decline pulling back over 12.5% from its recent all-time high reached on Mar. 14. In a recent research report Bitfinex notes that the latest retreat “was one of the largest price dips” since the introduction of spot Bitcoin exchange-traded funds (ETFs) earlier this year.
Despite the surge in inflows into spot Bitcoin ETFs, which surpassed a billion dollars in a single day last week, recent data suggests a stabilization in flows, prompting some market observers to pause.
“It would not be a surprise to see a period now in which the market seeks some equilibrium after the initial enthusiasm we have seen.”
Bitfinex
Bitcoin has seen remarkable growth since the beginning of 2024, with a 74% surge in value and a staggering 90% increase from its post-ETF slump lows. However, the recent sharp corrections, occurring twice within two weeks, hint at a potential deceleration in the strong uptrend observed since the latter half of 2023. While this doesn’t necessarily signify a bearish outlook, it may indicate a period of consolidation for the broader crypto market, analysts at Bitfinex say.
“The flow data from the upcoming week will be crucial in shedding light on tradfi investors’ sentiment towards Bitcoin, and in particular their reaction to the sharp corrections last week.”
Bitfinex
The analysts highlight that the upcoming week’s flow data will play a “crucial” role in understanding investors’ sentiment towards Bitcoin and assessing the broader investment community’s confidence in its stability.
At the time of writing, Bitcoin is facing selling pressure, trading below the $65,000 mark according to CoinMarketCap data. As crypto.news reported earlier, Markus Thielen, Founder of 10x Research, anticipates Mar. 19 to be pivotal for Bitcoin, suggesting a possible continuation of correction if ETF inflows fail to meet expectations amid recent market volatility.
Nonetheles, Thelen noted that despite the prospect of a deeper correction, the market can still argue that Bitcoin “will climb materially higher during the next few months as this bull market will likely continue.”