Bitcoin: Can ETF volumes sustain BTC’s bullish narrative?

  • ETF volumes continued to rise despite BTC price volatility, indicative of positive sentiment.
  • Overall activity on the Bitcoin network grew, owing to rising interest in Bitcoin NFTS.

Bitcoin [BTC] witnessed massive volatility over the last few days, causing many investors to become speculative of the king coin’s rally. However, recent ETF volumes may suggest that interest in Bitcoin has continued to grow.

ETF volumes paint a pretty picture

ETF analyst Eric Balchunas stated in a recent post on X that the ten Bitcoin ETFs collectively achieved a remarkable $10 billion in trading volume today, surpassing the previous record set just last week.

Balchunas noted the inherent correlation between volatility and volume in ETFs, expressing little surprise at these extraordinary figures.

Notably, these ETFs, including IBIT, FBTC, BITB, and ARKB, all experienced record-breaking trading days. The short Bitcoin ETF, BITI, surpassed its previous record by a substantial margin.

Balchunas anticipates even more excitement when 2x and -2x spot BTC ETFs are introduced, predicting a substantial influx of the trading crowd toward these offerings.

Interestingly, even BITO and BITX broke their respective records, highlighting the unexpected positive impact of the spot craze on futures ETFs.

Balchunas acknowledged the unpredicted spillover effect and suggests revisiting the topic in a year, but at the time of writing, the enthusiasm surrounding these ETFs remained evident.

Source: X

Roadblocks ahead

Despite the interest showcased by the surge in ETF volumes, the volatility shown by BTC recently could still impact sentiment around BTC negatively.

In the span of the last seven days, the price of BTC moved from $69,000 to $61,333 and then proceeded to recover. At press time, BTC was trading at $67,074.51.

The large fluctuations in BTC’s price could impact the perception of BTC negatively, especially new traders who recently entered the market.

Moreover, on 4th March, a total of $249.24 million led to liquidations for 90,403 traders, with BTC accounting for $75.96 million of the total liquidation amount.

Read Bitcoin’s [BTC] Price Prediction 2024-25

The liquidations caused by the sudden price movements could impact the bullish hubris exhibited by the traders and may result in reduced liquidity in the markets.

BTC liquidation

Source: Coinglass

In terms of its overall ecosystem, Bitcoin was doing relatively well. AMBCrypto’s analysis of Santiment’s data showed that daily activity on the Bitcoin network had grown. This was largely due to the recent spike in interest in Bitcoin NFTs.

Bitcoin BTC 15.18.26 06 Mar 2024.png

Source: Santiment

Next: Why a BONE rally might not be realistic in the near term

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