Bitcoin Holds $70K as BTC ETF Outflows Impact Market Mood

Bitcoin slipped below the $70,000 mark during early trading hours, before easing slightly. The drop came in amid continued outflows from US spot exchange-traded funds, which have begun to filter through to short-term sentiment. The asset dropped briefly under $69,000 before bouncing back above the psychological $70,000 level. Bitcoin was trading at approximately $70,716 at the time of writing, down a tiny 0.15 percent in the last 24 hours. 

Bitcoin Swings Back to $70K

Liquidations rose sharply around the same period. Total liquidations reached $406.85 million in 24 hours; the majority of this figure came from long positions, wiping out $301 million, and short liquidations stood at $105 million.

 The imbalance points to traders being caught off guard after the continued upside.

Also, global financial markets also moved lower. As per market data, major US indices ended the session in the red. Crypto-related equities suffered too. Shares of MicroStrategy, Marathon Digital, and Circle saw modest losses, as traders recalibrated expectations around inflation and supply dynamics.

ETF flows remained a key factor behind Bitcoin price weakness. Data tracked by sosovalue showed a net outflow of $90.2 million from U.S. spot Bitcoin ETFs in the latest session. Among the largest contributors, BlackRock’s IBIT saw outflows of $38.3 million, while Fidelity’s FBTC recorded $26 million in redemptions. Bitwise and ARK funds also witnessed notable declines. A few products, including those from Franklin Templeton and ProShares, registered small inflows, even as these were not enough to offset the global trend.

Irrespective of the recent outflows, institutional activity has not disappeared. In a separate development, Morgan Stanley has filed an updated S-1 form with the US SEC for its proposed spot Bitcoin ETF. The filing confirms plans to list the product on NYSE Arca under the ticker “MSBT.” If allowed, the fund could mark a notable shift, as the bank moves from distributing third-party products to issuing its own.

The revised filing includes more detailed operational elements. These cover how the fund will handle creation and redemption, custody arrangements for Bitcoin holdings, and initial issuance plans. For Morgan Stanley,this means greater control over pricing, structure, and client access.

Meanwhile, on-chain indicators point to cooling activity. Data shared by Matthew Sigel suggests that the 30-day average price of Bitcoin has dropped by nearly 19%, even as spot prices stabilize. Volatility has also eased. Realised volatility has fallen from 80% to 50%, while funding rates in futures markets have declined.

Network activity reflects a similar slowdown. Transfer volumes are down by 31%, and daily transaction fees have fallen by 27%. Long-term holders appear to be moving coins at a slower pace. Miners, however, continue to sell most of their newly generated Bitcoin, maintaining steady supply pressure in the market.

In derivatives markets, sentiment has turned more defensive. The put-to-call ratio has gone up to 0.77, the highest level since mid-2021. Options premiums linked to downside protection have also increased, showing that traders are preparing for potential volatility.

Macro factors continue to have an effect on direction. The Federal Reserve recently held interest rates steady in the 3.50% to 3.75% range, and flagged concerns around persistent inflation. Besides geopolitical tensions, this has pushed investors toward a more cautious position not just across crypto but other assets too.

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