On Wednesday, Bitcoin exchange-traded funds recorded their first net outflow since April 16, halting a streak of eight consecutive days of inflows.
The outflow represents a notable reversal after funds collectively attracted over $2 billion in net inflows during the previous eight trading sessions.
Bitcoin exchange-traded funds face an outflow of $56 million amid sideways price action.
Yesterday, the total net outflow from Bitcoin exchange-traded funds amounted to $56.23 million. This sudden shift in cash flow indicates a potential slowdown in institutional demand after a long accumulation period.
The consolidation of Bitcoin's price since April 25 may have contributed to this pullback. The daily chart evaluation of Bitcoin against the US dollar reveals that the leading currency has been trading within a narrow range since then, facing resistance at $95,427 and finding support at $93,749.
With Bitcoin's consolidation being tight and its failure to break key levels, some major investors are choosing to reduce risk by temporarily pulling capital from Bitcoin-backed funds. A long period of sideways price action comes with uncertainty about short-term momentum, making it difficult to maintain strong inflows into Bitcoin exchange-traded funds.
On Wednesday, the BlackRock iShares Bitcoin Trust (IBIT) was the only fund to buck the trend, recording a net inflow of $267.02 million, bringing its total historical net inflow to $42.65 billion.
The Fidelity FBTC fund experienced an outflow of $137.49 million from the fund in one day. Despite the withdrawal, FBTC's total historical net inflow stands at $11.63 billion.
The Bitcoin derivatives market shows mixed sentiments.
At the same time, despite the recent price consolidation, derivatives market data reflects a mixed sentiment among traders. Open interest in Bitcoin futures contracts has slightly decreased over the past day, indicating low activity.
At the time of publication, this stands at $61.50 billion, indicating a 1% decrease over the past day. A decrease in open interest like this suggests that traders are closing positions rather than opening new ones. This trend reflects uncertainty or a decline in conviction in the short-term price direction of Bitcoin.
However, the funding rate for the currency remains positive, indicating that long traders are still dominant. At the time of this report, it stands at 0.0039%, confirming the preference for long positions over short ones.
This bullish signal indicates that despite Bitcoin's price stagnation, many futures traders are still opening positions in favor of rising prices.
Additionally, the options market shows a higher volume of call contracts compared to put contracts, a sign that some market participants will continue to bet on a bullish breakout in the near term.
