Surviving the Storm: Bitcoin ETF Stays Strong Amidst 20% BTC Plunge

Key Points

• Despite Bitcoin’s recent decline, U.S. spot Bitcoin ETFs continue to accumulate.
• Bitcoin ETFs’ AUM and YTD flows have remained steady despite the drawdowns.

Despite a nearly 20% decline in Bitcoin (BTC), U.S. spot BTC ETFs have continued to accumulate. This accumulation occurred even as the largest digital asset fell below the $55K mark.

In June, BTC saw a significant drop from $71.9K to $58.4K. Further negative sentiment in July led to a new low of $53.4K, although it has since rebounded to $58K.

Bitcoin ETFs Show Resilience

Bloomberg ETF analyst Eric Balchunas referred to the recent drawdown as “nasty.” However, he noted that the ETFs’ AUM (assets under management) and YTD (year-to-date) flows have remained steady.

Balchunas added that BTC ETFs, which he likened to boomers’ holdings, were “hanging tough” during the drawdowns. Data from Farside Investors supported this statement, with YTD flows returning to the $15 billion mark after falling to $14.3 billion in late June.

However, Soso Value data revealed a nearly $10B decline in BTC ETFs’ AUM. Amid the recent drawdowns, it fell from $62.5 billion to below $50 billion.

Community Reactions and Bitcoin Price Action

Despite this, AUM has since recovered as flows improved at the start of the week. Positive net flows have been observed since last Friday, with inflows of $294.9 million and $216.3 million on Monday and Tuesday, respectively.

However, some market observers see the increased ETF flows as irrelevant to BTC price action on the chart. In fact, one user suggested the inflows were hedge funds shorting BTC on the futures market through cash and carry trade.

Market analyst Jim Bianco challenged Balchunas’ narrative of boomer involvement in BTC ETFs. He emphasized that boomers held a “tiny percentage,” with the majority of BTC ETF holders being ‘self-directed investors.’

At present, BTC is up 5.8% on a weekly basis and slightly above $59K. However, to demonstrate further strength, the recovery must clear the trendline resistance and reclaim the range-low of $60.8K.

The RSI (Relative Strength Index) and the Directional Movement Index (DMI) showed positive strengthening. However, RSI was below average, and DMI was far from a positive crossover, indicating that bulls still didn’t have absolute market leverage.

Interestingly, Glassnode founders, Negentropic, claimed that BTC’s RSI has bottomed on the daily chart, prompting them to adopt a bullish stance on BTC.