Bitcoin (BTC) prices are at a time when macroeconomic conditions offer little support and flows into ETFs continue to deteriorate.
Digital assets are “caught in a loop” where capital outflows and price declines reinforce each other, according to a recent analysis by Ecoinometrics.
The report highlights that risk appetite is “currently weak”. Investors are worried about the outlook. “And the financial situation has stabilized rather than eased,” the document said.
“While this combination does not fully explain the magnitude of the correction, it does explain why there is very little downside support,” the firm explains.
According to Ecoinometrics, the crux of the problem lies with Bitcoin ETFs, which are experiencing a new regime of sustained outflows, as seen in the graph below.
The entity remembers that when investors redeem their shares, issuers of these funds must sell the Bitcoins backing their titles.
“That sale lowers the price, triggers more redemptions, and the loop continues until the cycle ends,” the entity said. The data is not just about departures for several days in a row. This flow is “deep in the negative tail” of the historical pattern.
“This is characteristic of a flow-driven settlement regime rather than a normal two-way trading period,” the study notes.
Bitcoin ETF flows return to March levels
At the same time, 30-day capital flows returned to the levels observed during the March correction. this is, Significant decline in purchasing motivation By institutional and individual investors.
Our analysis suggests that unless this indicator shows clear signs of stabilization followed by a sustained rebound, it is unlikely that prices will be able to build a solid floor for starting a consistent recovery.
The reason is that there is a well-defined statistical relationship between capital inflows and price trends. As Ecoinometrics explains, “Every additional 10,000 BTC in inflows equates to an average price increase of 3.5%.” This link suggests that the market is highly dependent on a constant flow of new demand. This is to counter selling pressure and maintain the current valuation.
Without that fuel, even small selling events can have a disproportionate impact.. that, slows down the formation of solid support And the period of weakness will be prolonged.
The following graph shows the flow of funds into a Bitcoin ETF. It shows a worsening in recent weeks.. Inflows are currently at levels not seen since March of this year.
Worryingly, Ecoinometrics says there are no “signs of stabilization” so far. Therefore, the depletion point is reached “when this curve flattens out and starts to rise again.”
Short-term fluctuations in Bitcoin price are uncertain
Juan Blanco, CEO of BitData Consultores and professional investor, explains to CriptoNoticias that the macroeconomic environment is putting pressure on the ecosystem. This takes into account that Bitcoin’s short-term outlook is “uncertain as it is highly volatile and dependent on macro factors.”
Blanco said the current bearish movement in BTC and the crypto market as a whole is “highly dependent on global liquidity and the direction of capital into so-called ‘risk assets’.” Added to that, of course, is the negative impact on ETFs in recent weeks.
From their perspective, the interaction between these elements is Keeps the price of BTC in an intermediate state without an immediate catalyst. This is the case for laterizations above USD 80,000, as seen in the following graph.
But in the long run, Blanco argues, Bitcoin macro trend remains bullish This is thanks to foundations such as the protocol’s programmed scarcity, increasing institutional adoption, and its narrative as a store of value.
Remember that the maximum supply of Bitcoin is 21 million coins, and a halving every four years reduces the amount of issuance. “This has historically driven the cycle of appreciation,” he said.
It also focuses on Bitcoin’s gradual integration into global financial markets, the advancement of ETFs, and the expansion of Bitcoin’s use as a currency. Compensation for expansionary monetary policy and persistent inflation.
“After each down cycle, Bitcoin hit new all-time highs,” he recalled, reinforcing the long-term Bitcoin bullish narrative.
For now, the decisive signal remains the same: ETF flows. According to Econometrics, the market will not have a solid foundation until redemptions slow down and the 30-day curve shows a clear turn.
Until that happens, Bitcoin will remain “stuck in the loop” with high bearish pressure. and technical structures whose recovery has not yet been confirmed.
