(Bloomberg) — Bitcoin has fallen more than 10% from its all-time high as demand for an emerging physical Bitcoin exchange-traded fund slows. JPMorgan Chase & Co. strategists warned there was room for an exit.
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A group of 10 spot Bitcoin ETFs is on track to post its biggest weekly outflow since the product debuted on January 11th. Meanwhile, the world's largest cryptocurrency is set for one of its worst weeks of the year after falling 4%. As of 9:48 a.m. Friday in London, the token was trading at $65,434.
Read more: US Spot Bitcoin ETF records largest outflow in 3 days since launch
JPMorgan strategists say Bitcoin “still appears overbought” and could see further declines ahead of the long-awaited halving event in April, when the supply of newly minted Bitcoin from miners decreases. He reiterated his February claim calling for the same.
Continuing open interest in CME Bitcoin futures and declining ETF flows are significant bearish signals for Bitcoin prices, strategists led by Nikolaos Panigirtzoglou said in a note on Thursday.
“The pace of net inflows to Spot Bitcoin ETFs has slowed significantly, with significant outflows seen last week,” the strategists wrote. “This calls into question the notion that the Spot Bitcoin ETF flow diagram would be characterized as sustained unidirectional net inflows. With the positioning looking overbought, this profit-taking is likely to continue.”
Last month, the bank predicted that Bitcoin prices would decline towards $42,000 from April onwards as “the euphoria induced by the Bitcoin halving subsides.”
A net $836 million was withdrawn from the ETF between Monday and Thursday, a decline that stems from outflows from the Grayscale Bitcoin Trust and curbs on subscriptions to competing products such as BlackRock and Fidelity Investments. It reflects.
The fund has recorded $11.3 billion in net inflows to date, showing it remains one of the most successful debuts for the ETF category, according to data compiled by Bloomberg. $13.6 billion was lost from the Grayscale Bitcoin Trust, which was converted into an ETF.
Despite Bitcoin setting a record of around $73,798 on March 14, enthusiasm is waning among retail traders, according to Naeem Aslam, chief investment officer at Zaie Capital Markets. It is said that there is a possibility.
“The fact that the rally didn't really start from the all-time high like it used to made many question the strength of the rally,” Aslam said. “The halving is just around the corner, and if this event fails to maintain its momentum, we will face a severe retracement, which could mean the price could fall below $50,000.”
–With assistance from Jackie Edwards.
(Updated Bitcoin price and ETF flows)
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