Bitcoin Slips Below $59K Amid ETF Outflows and Waning Demand; Retail Investors Show Uptick
According to CoinDesk: Bitcoin's price dipped below $59,000 on Friday, marking a weekly loss of over 3.5%, as demand for the cryptocurrency wanes and exchange-traded funds (ETFs) see continued net outflows. The decline comes amid signs of reduced institutional interest, with U.S.-listed BTC ETFs recording $71 million in net outflows on Thursday, marking the third consecutive day of withdrawals, according to data from SoSoValue.
The largest withdrawals were seen in Fidelity’s FBTC, which lost $31 million, and Grayscale’s GBTC, which saw outflows of $22 million. Notably, BlackRock’s iShares Bitcoin Trust (IBIT), the world’s largest bitcoin fund by assets under management, recorded its second-ever outflow, totaling $13 million. This shift indicates a move away from bitcoin by professional funds.
Despite the overall decline, there are signs of increased interest from U.S. retail investors. On-chain analytics firm CryptoQuant reported an uptick in bitcoin price premiums on Coinbase, reaching the highest level since July. Additionally, bitcoin inflows from international exchanges to Coinbase have increased, suggesting higher demand from U.S. investors—a condition historically associated with price gains.
Traders are bracing for increased volatility in the coming weeks, particularly after Labor Day, as economic reports and political developments are expected to influence market movements. The past week has seen bitcoin trading largely sideways, despite positive signals such as potential rate cuts and endorsements from political figures like Donald Trump.
"Crypto had an uneventful week as BTC and ETH hovered around +/- 1.5% compared to last week's levels. ETF inflows remain subdued," Augustine Fan, head of insights at SOFA, noted in a weekly client update. Fan anticipates that market activity will pick up following the release of the U.S. non-farm payroll report and other key economic indicators.
QCP Capital, a Singapore-based trading firm, echoed this sentiment, predicting choppy price action in the short term. "Risk reversals until October are still skewed towards puts in both BTC and ETH, indicating that the market remains cautious about the downside," QCP said in a Telegram broadcast.
The Federal Reserve's anticipated pivot towards lower borrowing costs next month has historically bolstered bullish sentiment, as cheaper access to capital often drives growth in riskier assets. However, in the absence of immediate catalysts, prices are expected to remain within a tight range as September approaches.
The current market environment reflects a cautious outlook, with traders positioning themselves for potential rate cuts by the Fed. As the cryptocurrency market enters a traditionally volatile period, all eyes will be on how these dynamics play out in the weeks ahead.#BTC $USDC