The Bitcoin ETF narrative is once again at the top, while altcoins and protocols step back. In 2024, the expectations were for new all-time highs, driven by the demand for physical coins. The launch of multiple Bitcoin-based spot products sparked hopes of direct demand for BTC. Yet despite signs of buying and holding, the BTC market price is stagnating.

Market participants are losing patience as BTC trades between $69,000 and $71,000, with no signs of breaking its all-time high from March this year. Maximalists and short-term traders alike are questioning the price action while expecting a much bigger rally because of the effect of ETFs. 

BTC moved up only slightly on the news that BlackRock held an estimated 304,976 coins in its spot ETF.

Read: Crypto inflows hit $2b last week, pushing 5-week total to $4.3b

WhalePanda, one of the early Bitcoin influencers and part of the Magical Crypto Friends group, is tracking the disparity between ETF inflows and market price action. In the past few days, he has noted the lack of correlation between inflows and spot market performance. 

Good morning,Apparently my sleepy head didn't notice that I copied the 6th's data. A thousand apologies.Yesterday we had $131 million of inflows, with a weekly total of $1.83 billion.Blackrock did $168.3 million of inflows. Bitwise had $7.9 million of outflows and $GBTC… pic.twitter.com/3qmaSCNBdG

— WhalePanda (@WhalePanda) June 8, 2024

The current BTC market performance also follows a long period of expectation for a rally to $100K, especially after the halving in April. 

Other models, like the stock-to-flow (S2F), popularized by PlanB, a prominent Bitcoin maximalist, take into account recent institutional buying. 

Semler Scientific just bought another $17 million in #BitcoinThe era of MicroStrategy 2.0 is here. This is unstoppable now 🚀 pic.twitter.com/j2wIjntGKV

— Vivek⚡️ (@Vivek4real_) June 6, 2024

BTC on-spot exchanges are consolidating, with slower trading volumes, lower USDT liquidity, and a threat of liquidation. Traders remain cautious about a short-term dip to the $66,000 range or even lower with corrections. 

Who is Pressuring BTC: Miners, Paper Hands, or Short Sellers?

Adam Back, the founder of Blockstream, was also among the voices noticing the flat price action of BTC. Back pointed out the immense reported demand for ETF compared to the new supply of BTC tokens. 

and still under $100k. something has to give 🟩 🙂 pic.twitter.com/E7rOgSZTcq

— Adam Back (@adam3us) June 5, 2024

Several possibilities emerged, especially miners selling older stock created at a lower price. Miners have been unwinding their stock, but the current reserves are the lowest in the past 14 years. 

The low stocks mean miners cannot sell indefinitely, and the ETF can finally absorb the excess supply. Retail wallets and some whales are also in the money and not pressured to sell. 

The other reason for the stagnant BTC price may be traders’ short-term behavior, where bearish attitudes are emerging. The Bitcoin fear and greed index has been slowly deflating, down to 72 points. This level is still in the “greed range” but down from a recent peak at 75 points. 

At the same time, based on the distribution of short and long positions, only 31% of traders are bullish or very bullish. Based on recent Coinglass data, 34% of traders are bearish, and 13% are very bearish.

Most centralized exchanges maintain a balanced ratio of short and long positions, which helps keep liquidations within a tight range. The liquidations heatmap also reveals that the tight range prevents BTC from entering the short squeeze zone, where short positions are clustered. 

Just look at those liquidations at around 72.5 K levels. Insane. If we break through those (and we will), expect huge push on the upside.#bitcoin #crypto $btc pic.twitter.com/Vt6vi2K7ip

— Crypto Academic (@cryptoacademic) June 10, 2024

One reason for the current stagnation may be sellers trying to prevent the short liquidation at $72,500. Similarly, many short positions are clustered around $75,000, which is seen as a potential tool to cause a rally to $80,000.

Short sellers may be incentivized to pressure the price even at a lower range. If the efforts to stop the BTC rally fail, up to $5B in short liquidations may follow. Of those, around $1.2B is the target of this week’s bulls, sitting close to $70,200. 

Lets push the price to 70200 $BTC will see over 1.2 Billion short liquidationsDo you think we will see this move this week?#BTC pic.twitter.com/qGkVwz9ETB

— Crypto 4 Light (@vladi4light) June 10, 2024

Other gauges of market sentiment show 79% of traders as bullish. However, the defense of the current short positions emerges as one factor for the downward price pressure. Additionally, exchange data shows significant sell orders on-the-spot market in the past few days, placing 600 BTC for $72,000. Selling orders suggest the bull market is not in its early stages for some traders, and there may be a slide to a lower range instead of an immediate breakout.

The other immediate cause of price pressure is short-term holders, who have decreased their funds. Long-term holder waves show inflows into their wallets, but newer wallets are willing sellers.

Cryptopolitan reporting by Hristina Vasileva