Bitcoin: Will GBTC outflows continue to hurt BTC?

  • BTC outflows continued to rise due to GBTC’s behavior.
  • MVRV ratios remained high, indicating a high number of profitable addresses.

Bitcoin [BTC] was observed to be stagnating at the $51,000 price level for quite some time. One of the reasons for the lack of movement from BTC’s price was due to Grayscale Bitcoin Trust (GBTC)’s outflows.

Rising outflows

GBTC outflows have acted as a hindrance to BTC’s growth for quite some time. A recent report revealed a $199 million outflow from GBTC and a $111 million inflow from The Nine.

This resulted in a total daily net outflow of $88 million.

Additionally, there was speculation that GBTC may be selling a portion of the Genesis/Gemini shares.

The diminished institutional interest, particularly highlighted by the significant outflow of $199 million from GBTC, has the potential to cast a shadow on Bitcoin prices.

Institutions, often considered influential market participants, play a vital role in shaping overall market sentiment.

When a major investment vehicle like GBTC experiences a substantial outflow, it suggests that institutional investors might be reconsidering their exposure to Bitcoin.

Institutional interest is typically associated with confidence in the market, and a notable reduction can be interpreted as a signal of caution or even a shift towards a more bearish outlook.

Institutions typically conduct thorough analyses and risk assessments before making investment decisions.

If their reduced interest is driven by concerns about the future performance or inherent risks associated with Bitcoin, it could trigger a broader sentiment shift among market participants.

Source: X

Not all large investors

However, not all hope is lost, as some whales did show interest in BTC.

Notably, the largest whale cohort, holding between 1,000 and 100,000 BTC, has been accumulating. This accumulation pattern, a characteristic of bull markets, signaled a positive outlook among major holders.

Their buying activity commenced at around $29,000 and intensified as the price exceeded $46,000.

Read Bitcoin’s [BTC] Price Prediction 2024-2025

At press time, BTC was trading at $51,847.69 and its price had fallen by 0.26% in the last 24 hours. The MVRV ratio of BTC had remained high during this period.

This meant that despite recent price fluctuations, most holders were profitable at the time of writing.

Bitcoin BTC 15.06.59 22 Feb 2024.png

Source: Santiment

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