Canadian Bitcoin (BTCC) Purpose ETF (BTCC) has seen its Bitcoin (BTC) holdings halve in a single day, signaling an alarming drop in buying sentiment among more experienced crypto investors.
The goal of the Bitcoin ETF is to reduce AUM by 51%.
The fund’s holdings fell from 47,818 BTC to 23,307 BTC between June 16 and 17, the lowest level since October 2021. Related: Epic Crypto Fail: Engineer Throws Hard Drive Containing 7,500 Bitcoins To Trash. The 51% drop in BTC holdings is the largest daily flow ever.
Interestingly, another Canadian crypto fund, called the 3iQ CoinShares Bitcoin ETF, saw similar outflows, from 23,917 BTC on June 1 to 12,668 BTC on June 17, suggesting that the massive influx of BTC from purpose was not an isolated event.
More ‘forced selling’ of bitcoin?
The outflows came on the eve of Bitcoin’s brief breakout below $20,000, a level of psychological support that served as a peak during the 2017 bull run. The Tempus protocol has been rolled out to Fantom to deliver consistent returns over 10% APY. On June 20, the bitcoin price dropped to around $17,570, before rising again to $21,000 two days later.
However, the bitcoin giant’s use of funds has left evidence of record redemption rates from their institutional clients, which are allegedly fueled by fears that BTC will resume its downward trajectory below $2022 in 2022.
Arthur Hayes, the former CEO of the exchange noted, “I am not sure how redemptions will be carried out, but there are a lot of physical bitcoins to sell in a short period of time.” encryption BitMEX, adding:
Breaking under $20,000 is “easier” now.
Cash outflows from Bitcoin ETFs correlated with weak buying sentiment for riskier assets, due to the Fed’s hawkish stance on rising inflation. See the article: Here’s why Polkadot (DOT) needs to close above $18 today to avoid a bull trap.
Notably, Bitcoin has fallen more than 70% since it peaked at $69,000 in November 2021, mostly affected by the Fed’s benchmark interest rate hike and the systematic and complete dismantling of a $9 trillion balance sheet.
The US central bank cut interest rates by 75 basis points on June 15, the highest level since 1994. Meanwhile, its dot chart reveals that it wants to raise lending rates to 3.4% d by the end of 2022, from the current range of 1.5-1.75 %.
That could mean more upside throughout the year, which, in turn, could further hurt risk appetite, limiting the potential for Bitcoin to rally, as well as the stock market.
“The biggest problem I see right now is a global recession, and it’s just around the corner,” said Bawechaskarzewski, co-CEO of the decentralized finance (DeFi) platform Synapse Network, adding:
BTC levels to watch
The probability of Bitcoin retesting the $17,000-18,000 support would be guaranteed if Bitcoin price drops below the $20,000 mark again.
Meanwhile, continued selling could bring BTC down to $14,000, the highest level in May 2019. Interestingly, the visible range of the Bitcoin Volume Profile (VSVR) points to the $8,000-$10,000 range as the most widely based range. on trading activity.
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