Due to heightened inflation concerns, crypto exchange-traded products (ETPs) saw their first net outflows in 19 weeks, as the crypto market continues to decline.
CoinGecko data shows that Bitcoin briefly touched a low of $93,388.83 during the past 24 hours, before rebounding to above $95,000 as of press time. Ethereum fell 3% to $2,600, while Solana (SOL) dropped nearly 5% to a low of $163.
Maple Finance CEO Sid Powell stated: "The 3% drop in the crypto market today is not too surprising - it seems to be mainly driven by macroeconomic factors. The recent inflation report showed that inflation will persist, so the likelihood of rate cuts in the near term is low."
Crypto Fund Outflows
This pullback is also in line with the first net outflows from digital asset exchange-traded products (ETPs) in 19 weeks.
According to the latest CoinShares Digital Asset Fund Flows Weekly report, last week saw significant capital outflows from digital asset investment products, totaling $415 million. This marks the end of a 19-week streak of $29.4 billion in cumulative inflows.
The report states: "With investors continuing to seek to reduce risk exposures, ETFs ended a 19-week run of inflows, seeing their first week of net outflows, leading to selling pressure." CoinShares attributed these outflows to the hawkish signals from US Federal Reserve Chair Jerome Powell and higher-than-expected US inflation data.
The report noted that BTC was particularly impacted, with outflows of $430 million, reflecting its sensitivity to interest rate expectations. Interestingly, short Bitcoin investment products also saw $96 million in outflows.
In contrast, Solana led with $89 million in inflows, followed by XRP and Sui, with $85 million and $60 million in inflows, respectively. Crypto equity products attracted $208 million in inflows, bringing their year-to-date total to $220 million.
Technical Indicators Suggest Possible Retest of $92,000 Support
According to an analysis shared by Material Indicators on February 17th, Bitcoin may see further downside due to a "death cross" formation on the daily chart. A death cross occurs when the short-term moving average crosses below the long-term moving average, typically signaling a weakening of price momentum. However, the analysis also noted that there is buy-side liquidity around $95,000, and $92,000 is a secondary support level, which may help stabilize the price.
Further analysis of Binance order book data supports the view of an impending test. The technical chart shared by Material Indicators shows significant buy interest around $95,000, with almost all order types reducing their risk positions, except for retail traders. The $92,000 support level suggests that further downside may test this critical support area, laying the groundwork for future price action.
Traders remain cautious, with many closely monitoring technical signals. The appearance of the death cross suggests a potential long-term downtrend, but some investors view the current conditions as an opportunity to accumulate more Bitcoin. Material Indicators emphasized the importance of strategic planning in these market conditions, advising traders to remain patient and stay the course.
Standard Chartered Reaffirms $500,000 Bitcoin Price Target
Standard Chartered Bank maintains its $500,000 target price for Bitcoin, citing a changing investor landscape, including institutions, banks, and sovereign buyers. The bank expects Bitcoin to reach this level before the end of former US President Trump's term, driven by increased access channels and reduced volatility.
According to Standard Chartered, Bitcoin spot ETF purchases are expected to reach 499,000 BTC in 2024, while Strategy has purchased 257,000 BTC. The bank anticipates further institutional inflows in 2025, but emphasizes the need for new buyers to sustain the momentum.
The analysts wrote: "To achieve this target, we need new buyers; bank buying has been substantial, and now sovereign nations are getting involved."
A key factor supporting this outlook is data from US Securities and Exchange Commission 13F filings, which show an increase in Bitcoin positions held by banks and hedge funds in the fourth quarter.
Standard Chartered noted: "The buyer base will gradually evolve, from predominantly retail pre-ETF, to hedge funds in the early ETF period, and ultimately to sovereign investors." Looking ahead, the bank expects pension funds and central banks to join the market as long-term institutional investors.
