Bitcoin ETF inflows could potentially trigger a "sell-side" crisis in the upcoming months, warned one market observer. Following a 25% surge last week, Doge coin (DOGE) and Shiba Inu Coin (SHIB) retreated, dropping as much as 6%, while bitcoin (BTC) remained above the $71,500 mark on Tuesday.
Data indicates that other major tokens such as ether (ETH), Solana’s SOL, BNB Chain’s BNB, and Cardano’s ADA saw minimal changes over the past 24 hours. Among crypto majors, XRP led with a 10% gain within the same timeframe, propelled by a technical development announcement aimed at enhancing applications and services.
The CoinDesk 20 index (CD20), representing the twenty largest tokens excluding stablecoins, increased by 0.73%. The Bitcoin ETF Tracker shows that Spot bitcoin ETFs surpassed $10 billion in inflows for the first time since their launch in January, as highlighted by BitMEX Research in a Tuesday post. Some analysts suggest that continued inflows could lead to a "sell-side" crisis in the medium term.
"Bears cannot dominate until spot bitcoin ETF inflows subside," remarked CryptoQuant founder Ki Young Ju in a post. "Last week, spot ETFs witnessed netflows of +30K BTC. Notably, exchanges and miners hold around 3M BTC, including 1.5M BTC by U.S. entities," Ki added, predicting a potential sell-side liquidity crisis within six months.
Meanwhile, Singapore-based trading firm QCP Capital cautioned in a Telegram broadcast on Tuesday about a bullish sign in the bitcoin options market. Despite expressing bullishness due to elevated volatility for calls, QCP remained cautious, anticipating potential washouts with funding rates reaching high levels again. However, the firm still anticipated swift buy-ups of dips.
Volatility, a fluctuating factor influenced by options market activity, and funding rates, paid by leveraged traders, provide insight into the market's bullish or bearish sentiment.
Sign in to leave a comment.