Canadian ETF Purpose Bitcoin (BTCC) saw its bitcoin (BTC) holdings halve in a single day, suggesting an alarming decline in buying sentiment among more experienced cryptocurrency investors.
The Bitcoin ETF’s goal is to reduce AUM by 51%.
The fund’s holdings fell from 47,818 BTC to 23,307 BTC between June 16-17, the lowest level since October 2021. Epic Crypto Fail: An engineer throws a hard drive with 7,500 bitcoins in the trash. The 51% drop in holdings in BTC is also the largest daily outflow ever recorded.
Interestingly, another Canadian crypto fund, called 3iQ CoinShares Bitcoin ETF, experienced similar outflows, from 23,917 BTC on June 1 to 12,668 BTC on June 17, suggesting that the massive outflow of BTC from Purpose was not an isolated event.
More bitcoin “forced sales” on the way?
The outflows came on the eve of bitcoin’s brief break below $ 20,000, a psychological support level that served as a high during the 2017 bull run. The Tempus protocol is implemented on Fantom to provide fixed returns in excess of 10% of APY. On June 20, the price of bitcoin dropped to around $ 17,570, only to recover to $ 21,000 two days later.
However, the giant bitcoin spewing funds has left evidence of record repayment rates from their institutional clients, presumably fueled by fears that BTC will resume its downward run below $ 20,000 in 2022.
“I’m not sure how they execute the redemptions, but that’s a lot of physical BTC to sell in a short amount of time,” noted Arthur Hayes, the exchange’s former CEO. crypto BitMEX, adding:
Getting below $ 20,000 is “easier” now.
Cash outflows from Bitcoin ETFs are linked to weaker buying sentiment for riskier assets, due to the Federal Reserve’s ultra-hawkish stance against rising inflation. See the article: That’s why Polkadot (DOT) must close above $ 18 today to avoid falling into the bulls trap.
Notably, bitcoin has fallen more than 70% since it peaked at $ 69,000 in November 2021, mostly dragged down by the Fed’s benchmark rate hikes and the systematic and complete liquidation of a $ 9 balance sheet. trillion.
The US central bank cut rates by 75 basis points on June 15, the highest level since 1994. Meanwhile, its dot chart reveals it wants to bring lending rates to 3.4% by the end of 2022. from the current range of 1.5-1.75%.
This would mean more upside over the course of the year, which, in turn, could further damage risk appetite, limiting the upside potential of bitcoin, as well as the stock market.
“The biggest problem I see right now is a global recession, which is just around the corner,” said Paweł Łaskarzewski, co-CEO of the decentralized finance (DeFi) launch platform Synapse Network, adding:
BTC levels to watch
The likelihood that bitcoin will be able to retest the $ 17,000-18,000 support will be almost guaranteed if the bitcoin price falls below the $ 20,000 mark again.
Meanwhile, continued selling could push BTC down to $ 14,000, its May 2019 high. Interestingly, Bitcoin’s Volume Profile Visible Range (VSVR) further points to the $ 8,000- $ 10,000 range as the most dominant in base. to trading activity.
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