In light of Bitcoin’s recent price drop, there’s speculation from crypto analyst Young Ju that demand for Bitcoin ETFs could surge. Young Ju highlights that new BTC whales have entered the market with a cost basis around $56,000, indicating potential for significant capital influxes into the spot Bitcoin ETF market if Bitcoin reaches this price level.
Despite the ongoing decline in Bitcoin’s price, the spot Bitcoin ETF market has faced challenges recently. However, Young Ju, CEO at CryptoQuant, remains optimistic about a potential resurgence in demand for Bitcoin ETFs.
In a recent post on X dated March 22, Young Ju shared insights suggesting that netflows into spot Bitcoin ETFs could increase despite the ongoing decline in BTC price. Analyzing historical netflow trends, Young Ju points out that demand for Bitcoin ETFs tends to rise when the cryptocurrency approaches certain support levels.
Recent data from analytics firm BitMEX Research indicates that Bitcoin ETFs have experienced negative netflows for the last four trading sessions. This trend is characterized by significant outflows from Grayscale’s GBTC and record low inflows for other ETFs, particularly market leaders like BlackRock’s IBIT and Fidelity’s FBTC.
Young Ju emphasizes that new BTC whales, particularly ETF buyers, have an on-chain cost basis of approximately $56,000. This suggests that major Bitcoin holders, especially ETF investors, acquired Bitcoin at an average price of $56,000.
Following this trend, the crypto quantitative expert anticipates substantial inflows into the spot Bitcoin ETF market if Bitcoin manages to reach the mentioned price threshold.
While Bitcoin’s price has fluctuated between $62,000 to $68,000 over the past week, Young Ju suggests that a decline to $56,000 is plausible, considering that corrections typically see a maximum drop of 30%. With Bitcoin’s recent peak at $73,750, the analyst forecasts a potential drop to as low as $51,000.
Despite a recent 13% drop in Bitcoin’s price over the past 48 hours, from its new all-time high of $73,835 to briefly trading near $60,000, this correction was attributed to overheated market conditions. Analysts refer to it as a “pre-halving retrace” ahead of the Bitcoin halving event, which is roughly 30 days away.
A report by CryptoQuant indicates that the Bitcoin bull cycle isn’t over, given the relatively low level of investment flows from new investors and price valuation metrics still below levels seen in past market tops.
Moreover, the upcoming Bitcoin halving event is expected to drive further bullish sentiment, potentially leading to a parabolic uptrend. According to CoinMarketCap’s halving countdown, Bitcoin’s next halving event is less than 31 days away.
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