Bitcoin’s price has been under pressure recently, with experts predicting a potential drop to $75,000 due to weak institutional demand and declining ETF inflows. This forecast underscores growing concerns within the market, particularly as Bitcoin appears to be forming a bearish flag pattern on the charts coupled with a significant reduction in treasury investments by companies holding Bitcoin.
Market Signals Shift as Bitcoin Faces Resistance
Despite a notable recovery, with a rise of 13% from its November lows, Bitcoin has encountered significant resistance at the 50-day Exponential Moving Average (EMA). This resistance suggests that the recent uptick might be a mere temporary rebound rather than a signal for a sustained bull market. Technical indicators continue to highlight the risks, particularly the formation of a bearish flag on the daily chart, which often precedes a substantial price drop.
Traders are closely monitoring this bearish flag, which consists of a downward movement followed by consolidation. Experts warn that this pattern could lead Bitcoin further down, aligning with earlier predictions of a potential price fall to $75,000.
ETF Inflows Reveal Declined Institutional Interest
One significant factor driving this bearish outlook is the notable slowdown of institutional demand, particularly from Bitcoin exchange-traded funds (ETFs). This year, while Bitcoin ETFs managed to attract $237 million in inflows, this figure sharply contrasts with the much higher inflows of $5.2 billion and $6.02 billion seen in May and June, respectively.
Furthermore, since November, Bitcoin ETFs have experienced a whopping $3 billion loss in inflows. The decreasing interest in these funds signals a troubling trend for institutional investment in Bitcoin. As the demand diminishes, the market appears increasingly vulnerable to volatility and price fluctuations.
Significant Declines in Treasury Holdings
The trend of declining interest is further exemplified by the drastic reduction in Bitcoin treasury purchases. Recent data reveals that only nine companies have announced plans to integrate Bitcoin into their treasuries this quarter, representing an 83% decrease compared to 53 companies in the third quarter. This suggests a troubling shift away from Bitcoin as corporations reassess their investment strategies.
As institutional activity diminishes, there are concerns that existing holders might begin to liquidate their positions, especially in the face of declining prices. This potential selling pressure could further accelerate Bitcoin’s downward trajectory, exacerbating market volatility.
The Bigger Picture: Long-Term Demand Concerns
This erosion in both ETF inflows and treasury purchases indicates a broader shift in the market. Historically regarded as a solid store of value, Bitcoin’s appeal to institutional investors may be waning. With fewer entities looking to add Bitcoin to their portfolios, the cryptocurrency could face substantial challenges in maintaining its current price levels.
Although Bitcoin’s price has recently rebounded slightly, the convergence of technical and institutional shifts indicates the possibility of a further decline to $75,000. The trajectory of these trends will play a crucial role in determining Bitcoin’s price movement in the coming months.
