Sentiment seems to be improving in the cryptocurrency market as we head towards July. The Bitcoin spot ETF ended seven consecutive days of net outflows on the 25th, and net inflows reached $73 million on the 28th, setting the highest single-day inflow in two weeks.
In addition, according to digital asset investment product flow data collected by CoinShares, although the latest week is the third consecutive week of net outflows, the total outflows have shrunk significantly from the US$598 million and US$582 million in the previous two weeks, and have dropped to a net outflow of 3,000 in the latest week. Ten thousand U.S. dollars.
CoinShares: Signs of improving Bitcoin sentiment
CoinShares said in the report that most digital asset issuers experienced small inflows compared with previous weeks, although this was offset by Grayscale’s $153 million in outflows.
In terms of products, multi-asset and Bitcoin ETPs led other products with net inflows of US$18 million and US$10 million respectively, and the total outflow of short Bitcoin last week increased to US$4.2 million, indicating that market sentiment may be changing .
A range of other Altcoin also saw inflows, most notably Solana ($1.6 million) and Litecoin ($1.4 million); however, Ethereum saw its largest outflows since August 2022, totaling The $61 million brings outflows over the past two weeks to $119 million and makes it the asset's worst net flow performer so far this year.
From a regional perspective, the United States saw US$43 million in inflows, while Brazil and Australia saw US$7.6 million and US$3 million respectively. Negative sentiment permeated Germany, Hong Kong, Canada and Switzerland, with outflows of US$29 million, US$23 million, US$14 million and US$13 million respectively.
Coinbase premium index reaches lowest level since 2022/11
In addition to fund flow data suggesting a reversal in Bitcoin sentiment, the Coinbase Premium Index fell to nearly -0.19 on Friday, its lowest level since the FTX crash in November 2022.
In addition, David Lawant, head of research at cryptocurrency trading platform FalconX, added that the last time the Coinbase premium index had such a negative value was a few months before the sharp rise from October last year to March this year. In other words, the indicator was in May this year. The negative values in August and June echoed the calm market conditions in August and September last year. Therefore, he asked: "Is it always darkest before dawn?" This indicates that he is speculating that the price of Bitcoin is about to bottom out and may move higher next.
The Coinbase Premium Index is the difference between the BTC price on Coinbase and the BTC price on other exchanges. This negative data shows weak demand and selling pressure from US investors. One of the reasons behind this may be that investors are worried about the US government selling through Coinbase. The assets were confiscated, resulting in a discount on Coinbase’s BTC price.
In the past history, when the Coinbase Premium Index experienced serious negative values, it was often close to the current price bottom, and BTC subsequently rebounded sharply in the coming months. For example:
- In early November 2022, the Coinbase Premium Index fell to a rare low of -0.33, coinciding with the BTC bear market lows below $16,000, before prices surged to nearly $25,000 by February. An increase of more than 50%.
- The index low occurred in August 2023, a few weeks before Bitcoin bottomed around $25,000. Bitcoin then rose from October to January, almost doubling in price, and hit another all-time high in March.
- Most recently, the indicator plummeted to a low of -0.17 on May 1, when Bitcoin was trading around $58,000, before rising by around 27% to nearly $72,000 in June.
Expert: BTC will be very good in the next six months to one year
Lawant said this highlights the significant influence of the U.S. market in determining the price of Bitcoin:
At least recently, the Coinbase Premium Index has become a reliable, deterministic, and sometimes even leading indicator of overall market trends.
Lawant further said that he expects this trend to continue given that several upcoming catalysts are U.S.-centric — ETF flows, interest rate cut expectations and the U.S. presidential election:
There are signs that the next six to 12 months are going to be great, but also potentially volatile.
