Daily outflow of $635 million! Bitcoin spot ETF suffers heavy losses, is the market starting to worry?

The capital inflow that once propelled Bitcoin above the $80k mark in ETFs is now waning.
From March to April this year, a total of $32.9 billion was attracted by 11 Bitcoin spot ETFs in the United States, but now they are not only facing capital outflows, and the scale of the outflow is significant.
According to SoSoValue data, all 11 Bitcoin spot ETFs in the U.S. withdrew a total of $635 million on Wednesday, marking the largest single-day net outflow since January 29 of this year, continuing the recent downward trend.
In the past five trading days, these ETFs have collectively lost $1.26 billion.
As a result, the cumulative net inflow of Bitcoin spot ETFs since their listing in January 2024 has dropped from $59.76 billion a week ago to $58.5 billion.
Alongside the capital withdrawal, Bitcoin’s rally has come to a halt.
Looking back to last week, Bitcoin surged from $65k to over $80k, but encountered resistance after reaching near $82k at the “200-day Simple Moving Average (200-day SMA).”
In the past 24 hours, Bitcoin has fallen about 1.5%, down to $79,736.
Analysts believe that although the Nasdaq and S&P 500 indexes hit all-time highs on Wednesday, indicating Wall Street’s muted reaction to inflation data, the cryptocurrency market appears more sensitive to rising inflation.
In March and April this year, Bitcoin ETFs attracted as much as $3.29 billion in capital inflows, which was widely seen as a key driver for Bitcoin’s return to a bull market.
Now, facing large-scale withdrawals in a short period, the bullish camp finds it hard to dismiss the situation lightly.
Adam Haeems, Asset Management Director at Tesseract Group, said: “If the U.S. Consumer Price Index (CPI) remains persistently high, and the market perceives that the upcoming Federal Reserve Chair Kevin Warsh will adopt a more hawkish stance, or if there’s another oil price shock, even if ETFs continue to see net inflows, Bitcoin’s growth potential could still be constrained.”

For us, the focus is not on whether the upward trend will continue, but on whether the overall economic environment remains sufficiently accommodative to allow these ETF funds to have an effect.

It’s worth noting that the relationship between ETF capital flows and Bitcoin prices is no longer as direct as it used to be.

According to Pearson correlation coefficient studies, the 90-day rolling correlation between Bitcoin’s daily returns and the changes in ETF net inflows has dropped sharply from a high of 0.68 in February to the current 0.16.
Statistically, 0.16 is close to zero, indicating that the correlation between the two is now very low.
In other words, simply looking at whether ETF funds are flowing in or out makes it difficult to predict the price movement of Bitcoin.