Bitcoin again faced selling pressure on January 21 after US spot Bitcoin ETFs saw a net outflow of $709 million in a single day. In two trading days, the total withdrawal of funds reached $1.58 billion.
Market flow data reveals that 17,330 BTC were withdrawn from ETF products during this time, which is one of the biggest short-term declines in institutional holdings this year.
BlackRock sold 4,030 BTC worth $356.5 million. Fidelity sold close to 3,250 BTC worth $287.7 million. In total, the spot crypto ETF experienced an outflow of $985.5 million on the day, indicating a trend of risk aversion among large investors, rather than a phenomenon specific to individual funds.
Source: X
Also Read: Bitcoin (BTC) Drops Toward $88K as Analysts Flag Three Key Supports
According to recent analysis from analysts CrypFlow, the weekly chart of Bitcoin is experiencing some changes that have preceded big declines in the past. In the current cycle, the 50-week moving average and the RSI of 45 on the weekly chart have typically provided support in the past.
These levels were breached in November, putting an end to a pattern that had been in place since the start of the bullish trend.
The last similar case occurred in early 2022, shortly after Bitcoin reached a local top. At that time, momentum instruments briefly recovered but failed again, which led to a long decline.
Currently, the market is following a similar course, with a bullish stochastic RSI cross indicating a possible short-term rebound, although the first attempt to return to RSI support has already failed.
Source: X
Momentum indicators remain cautious. The weekly RSI is making its way towards the 40-45 zone, which is normally associated with initial bear markets and not with sustained bull markets.
While short-term momentum conditions improve, a signal towards the 105,000 zone is possible, but failing to hold the 50-week moving average would likely force markets to sell rallies rather than advancing.
If Bitcoin is not able to remain above its moving average quickly, then the overall scenario is of a defensive phase, rather than a continuation of the previous trend.
Large ETF outflows coupled with a weak weekly setup indicate that large market players are shifting their market bets, and this poses a risk to the downside if the key support levels remain broken.
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