More “forced sell-offs” ahead?Target Bitcoin ETF holdings plunge 51% in biggest outflow ever

Canadian Purpose Bitcoin ETF (bitcoin) witnessed its Bitcoin (bitcoin) holdings halved in just one day, a sign of worryingly waning buying sentiment among the cryptocurrency’s most seasoned investors.

Target Bitcoin ETF Cuts AUM by 51%

The fund’s holdings fell from $47,818 BTC to 23,307 BTC between June 16 and June 17, the lowest level since October 2021. The 51% drop in BTC holdings is also the largest daily outflow ever.

Target Bitcoin ETF holdings. Source: Glassnode

Interestingly, another Canadian crypto fund called the 3iQ CoinShares Bitcoin ETF, witness A similar outflow, which fell from 23,917 BTC on June 1 to 12,668 BTC on June 17, shows that the massive BTC withdrawal for purpose was not an isolated event.

3iQ CoinShares Bitcoin ETF holdings. Source: Glassnode

Will there be more “forced sales” of Bitcoin in the future?

The outflow of funds occurred on the cusp of Bitcoin A short break below $20,000, a psychological support level that topped during the 2017 bull market. Notably, the price of BTC fell to around $17,570 on June 20, only to recover $21,000 two days later.

BTC/USD daily price chart. Source: TradingView

Nonetheless, the funds’ huge bitcoin vomit left evidence of record redemption rates for their institutional clients, allegedly driven by fear BTC will resume its bear market below $20,000 in 2022.

“I’m not sure how they executed the redemption, but it’s selling a lot of physical BTC in a short period of time,” famous Arthur Hayes, former CEO of the BitMEX crypto exchange, added:

“Given the poor risk management of #cryptocurrency lenders and overly lax loan terms, expect more $BTC and $ETH to be force-sold as mrkt finds out who is swimming naked.”

Below $20k is ‘easier’ now

Bitcoin ETF outflows linked to waning buying sentiment in risky assets, Fed-led Extremely hawkish stance Fight against rising inflation.

Notably, Bitcoin has fallen more than 70% from its all-time high of $69,000 set in November 2021, largely beset by the Fed’s benchmark interest rate hike and the systematic and radical shrinking of its $9 trillion balance sheet.

US Central Bank Cut rates by 75 basis points On June 15, it was the highest level since 1994. Meanwhile, its “dot plot” shows it aims to push lending rates from the current 1.5-1.75% range to 3.4% by the end of 2022.

FOMC’s assessment of future interest rates.Source: Econometrics

That would mean more rate hikes this year, which in turn could further damage risk appetite and limit Bitcoin and the stock market’s recovery potential.

related: How to survive in a bear market?Tips for Beginners

Paweł Łaskarzewski, co-CEO of Synapse Network, a DeFi launchpad platform, said: “The biggest problem I see right now is that a global recession is coming.” He added:

“Because of this, retail and institutions are too scared and don’t have the capital firepower they had a year ago. So it’s a lot easier to break the $20,000 line because the market is shallower because there may not be enough capital to get it back. “

BTC levels to watch out for

If BTC price falls below $20,000 again, the possibility of Bitcoin retesting $17,000 to $18,000 as support is all but guaranteed.

Meanwhile, a sustained sell-off could take BTC to its May 2019 peak of $14,000. Interestingly, Bitcoin’s Volume Visible Range (VSVR) further suggests that the $8,000-$10,000 range is the most dominant range based on trading activity.

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