Bitcoin Investment Products see US$141 Million Record Outflow, Technical Charts say BTC Price Likely to make Further Losses in Short Term
Analytics firm CoinShare’s latest June 7 Digital Asset Fund Flows Weekly report shows that institutional investors have reduced their Bitcoin exposure by around US$141 million last week.
During the heavy crypto market meltdown in May 2021, around US$100 million worth of money was withdrawn from cryptocurrency products during May 10-16, 2021. Though the outflow slowed down at the end of May, it again increased in the first week of June 2021.
To increase the woes for Bitcoin, its trade volume is also witnessing a sharp fall. A 62% drop in trade activity was witnessed in the first week of June with respect to the weekly average in May.
However, not everything is gloomy. CoinShares has highlighted that despite the bearish sentiment of institutional investors towards Bitcoin since early May 2021, the extent of outflow is less than 1/10th of the inflows in 2021. In 2021, over US$4.2 billion in capital has been invested in Bitcoin. The report underscored:
“The outflows represent 8.3% of the net inflows seen this year and remain minimal on relative terms to the outflows seen in early 2018.”
The report pointed out that the amount of funds that outflowed from Bitcoin in recent times got reinvested in other cryptocurrencies, especially in Ethereum (ETH). Last week, the fund inflows in Ethereum were US$33 million. Other altcoins that are seeing increased exposure are Ripple XRP and Cardano (ADA). XRP and ADA received US$7 million and US$4.5 million institutional investment last week.
Technical Charts show Bitcoin Price Likely to Decrease in Short Term
Bitcoin price has not only failed to move above the US$40,000 price level but also failed to remain above the support zone at US$36,500. This led to the extension of BTC’s decline in price, which also broke the support level at US$35,500 and ultimately settled below the 100 hourly SMA (simple moving average).
On the BTC/USD pair’s hourly chart, a clear break took place below the major ascending channel with support near the US$35,600 level. This made the decline gain pace, leading to a fall in price below the psychologically strong support level at US$35,000 and went on to break the US$34,200 level.
Strong resistance is located near the US$34,150 level, which is located near the 23.6% Fibonacci retracement level of the recent decline from the high at US$36,824 to a low at US$33.350. This resistance level has also broken and the price of Bitcoin against the US Dollar is currently hovering around US$32.836.08.
The first major support level is located near US$32,500 followed by US$30,000. If the investors fail to protect these two support levels, there could be a sharp decline and the BTC price may also struggle to remain above the support zone at US$30,000.