Bitcoin decline has made ETF investments unprofitable — CryptoQuant

Analysts believe the market has reached a point at which investors stop locking in profits. The bitcoin price of $86,600 serves as a psychological threshold: if the crypto asset remains above the average ETF share cost, this will strengthen investor confidence and stabilize capital inflows. A sustained drop below this level carries the risk of mass sell-offs — investors would lose their “profit buffer” and begin withdrawing capital, CryptoQuant suggested.

“This is about behavioral stress. Right now, bitcoin is trading at a level where ETF investments are being stress-tested, and there is a risk of mass liquidations,” the analysts wrote.

Total investments in bitcoin ETFs peaked in October at $72.6 billion. However, by January, fund assets had declined by 8.4%, to $66.5 billion. At the same time, the average entry price for investors remains stable and is even showing an upward trend, experts say. Capital outflows indicate the exit of less resilient participants — those who invested at the market peak or seek to lock in remaining profits before further losses occur.

According to British investment firm Farside Investors, BTC ETFs have seen net outflows since January 16. Only on one day during the month was there a modest inflow of $6.8 million, while ETFs still lost capital overall.

As of 17:00 GMT on Wednesday, January 28, bitcoin is trading at around $89,465. Over the past three months, the leading cryptocurrency has fallen by more than 20%.

It is precisely exchange-traded bitcoin funds — or rather, strong demand for them — that can quickly exhaust the available supply of the cryptocurrency and, as a result, drive up the asset’s price. The price increase would be delayed but extreme, similar to the recent rally in gold, according to Bitwise Chief Investment Officer Matt Hougan.

See also: "Timothy Peterson has issued a Bitcoin price forecast for February"

#Bitcoin (BTC) #ETF #Forecast

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