Bitcoin Price News: Rally at Risk as Investors Take $1.4 BN Out of BTC ETFs

Bitcoin (BTC) has gone down by 3.5% in the past 7 days after the market rejected a move above $83,000.

Geopolitical tensions no longer seem to be driving the price action lately. Instead, market participants seem to be skeptical about buying at these levels due to the risk that this could be a “bear market rally” instead of the beginning of a true recovery.

This kind of volatile sentiment has plagued the crypto market for months, but we still believe that the worst of this bear market is over despite the latest pullback.

That said, investors are not buying into that “early cycle” narrative, as reflected by the behavior of net inflows to exchange-traded funds (ETFs) linked to the top crypto.

Bitcoin ETFs Report 5-Day Net Outflows of $1.4 Billion

In the past 5 days alone, investors took out more than $1.4 billion from these vehicles. This reflects strong disbelief in the rally’s strength, even though BTC just retreated by 3%.

It is highly likely that BTC will book its second consecutive week of negative outflows. Last week, ETFs linked to cryptos broke a 7-week streak of positive fund flows. This occurred in the context of the official appointment of Kevin Warsh as the head of the U.S. Federal Reserve.

A handful of factors could be contributing to the top crypto’s ongoing consolidation, including an unstable geopolitical landscape, no rate cuts in sight, and persistent tensions over tariffs.

Despite these headwinds, we have stated in previous Bitcoin price predictions that whales have kept accumulating BTC massively both in the past month and during the first 20 days of May.

This month alone, they purchased over 30,000 tokens valued at more than $2 billion. Adding up last month’s total, whales have poured more than $6 billion into BTC, indicating strong bullish positioning as the price keeps recovering.

Similar, open interest (OI) in the futures market has been steadily increasing, indicating that traders are progressively coming back to the market. Although confidence is still at low levels and social volumes remain heavily depressed, we are seeing some early signals that this is a true recovery and not a bear market rally.

Weekly Buy Signal Still Valid Despite the Latest Retreat

Heading to the weekly chart, we keep monitoring a historical buy signal in this higher time frame that has yielded impressive results in the past.

We believe that this signal marked the end of this bear market, and that $60,000 was this cycle’s bottom. A bold statement indeed, but it is what the charts seem to be indicating.

This time, we will be applying our signal system to analyze if this would be a good time to buy BTC based on historical patterns. As the chart shows, the last three times that the Relative Strength Index (RSI) has dropped below 30 in this higher time frame, BTC has started its ascent to a new all-time high.

Two out of three times, the price has not made a lower low after the signal. Meanwhile, the strategy has a 100% win rate for buy-and-hold investors. For traders, it would be a 66% win rate assuming that your stop loss was triggered as the price made a lower low in 2022.

As the chart indicates, the ideal time to buy BTC in all of these three instances has been when a “buy” signal from our system pops up. Sadly, that has not happened yet during this last signal.

Hence, caution is advised as a repeat of the 2022 lower low could occur this time, especially if one considers the many headwinds that are affecting the market’s performance at the time.

That said, we did get a buy signal in the weekly RSI as the oscillator rose above the 14-week moving average. This has also been a “canary in the coal mine” kind of move that has preceded previous rallies.

BTC has delivered outstanding gains these last three times, and we have no reason to believe that it will be different this time. So, stay tuned for our updates and future Bitcoin price prediction articles to keep track of whether we get a buy signal in the weekly chart or not.

Key Levels to Watch for Bitcoin – Two Possible Scenarios

Heading to the daily chart, we can see various interesting technical events. The first one was a clear rejection of a move above the 200-day exponential moving average (EMA).

This is a closely watched technical indicator. BTC’s retreat indicates that a portion of the market still sees rallies as opportunities to dump their tokens at a higher price, meaning that they are positioning for further downside.

Moreover, we can see that BTC has hit a key support at $77,000. This area acted as resistance in previous instances, but seems to be containing the latest pullback thus far. If the price stays above this mark, we expect that BTC will retest the 200-day EMA soon.

We see two scenarios in the short term for BTC. Either we break the $77,000 support and head to the trend line support highlighted in the chart, or we break past the 200-day EMA once and for all and hit $85,000 in the near term.

Meanwhile, if we break that trend line support, the odds favor a retest of the cycle’s lows at $60,000. This wouldn’t invalidate the weekly buy signal, as it has happened in previous instances.

In fact, one out of three times, BTC has dipped below that low and then resumed its earlier rally and made a new all-time high months later.