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Bitcoin Faces Some Bearish Pressure Amid ETF Outflows

Bitcoin has been under pressure as it experiences continued outflows from spot exchange-traded funds (ETFs).

The largest cryptocurrency was down 0.1% over the past 24 hours to $65,474, reflecting a trend that has been ongoing since it hit a record high near $74,000 in mid-March. This downward momentum is surprising given the recent renewal of all-time highs by the Nasdaq and S&P 500 indices.

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"The latest momentum shows that the bears in crypto are in control," noted Alex Kuptsikevich, senior market analyst at FxPro. Spot Bitcoin ETFs have recorded outflows of nearly $300 million this week, as reported by crypto data firm Coinglass. The high bond yields and market's recalibration of interest-rate cut expectations from the Federal Reserve have contributed to the lackluster performance of cryptocurrencies.

Whales and Miners: Major Sellers of Bitcoin
Long-term Bitcoin holders and miners have been significant sellers in recent weeks. According to on-chain analysis firm CryptoQuant, these groups have shown little renewed buying interest. Wallets tracked by CryptoQuant indicate that large holders, known as "whales," have sold over $1.2 billion worth of Bitcoin in the past two weeks, primarily through brokers rather than on the open market.

The trend is underscored by a decrease in Unspent Transaction Output (UTXO) age bands, signaling increased selling activity. UTXO age bands, used by traders to track buying and selling patterns, show a drop, indicating higher Bitcoin activity and selling pressure.

Market analysts suggest that miners may be shifting their focus to the booming artificial intelligence (AI) sector due to diminishing mining rewards post-halving. "One of the biggest trends since Bitcoin halving this year is that miners are increasingly diverting to AI business," said Lucy Hu, senior analyst at crypto wealth management company Metalpha. The transition is driven by the need to boost revenue as mining rewards decrease, with AI firms requiring energy-intensive data centers that miners can supply.

Bitcoin's Struggle Amid Broader Market Movements
Since June 5, Bitcoin prices have fallen from $71,000 to just over $65,000, impacted by a strong dollar, a flight from riskier assets, and growth in traditional stock indices. U.S.-listed ETFs tracking Bitcoin recorded net outflows of over $600 million last week, their worst performance since late April.

"Traders are still not increasing their Bitcoin holdings, and large holders' (whales) demand growth is still missing strength," CryptoQuant analysts wrote. The decline in stablecoin liquidity, growing at its slowest pace since November 2023, further underscores the bearish sentiment in the market.

Despite the recent setbacks, some traders have cautioned that Bitcoin could drop to as low as $60,000 in the absence of new growth catalysts. Meanwhile, Ether—the second-largest cryptocurrency—has shown resilience, rising 0.5% to $3,580 and more than doubling over the past 12 months.

The broader cryptocurrency market is also feeling the pressure, with smaller cryptos or altcoins like Solana and Cardano experiencing declines. Solana fell 3.8%, Cardano dropped 1.3%, and Dogecoin decreased by 1.2%.

As Bitcoin continues to navigate these challenges, the market remains watchful for any signs of renewed demand or potential shifts that could alter the current bearish trajectory.

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