Spot ETF flows plummeted, Bitcoin fell below $63,000

Cryptocurrency markets continued to fluctuate on Friday, with Bitcoin falling below $63,000 from the $67,000 area earlier. It is currently trading at $62,497.8, down 4.4% in the past 24 hours and 8.52% in seven days.

The sell-off affected the entire altcoin market. Solana ’s SOL token fell more than 10% at one point, Polkadot (DOT) fell 15%, and Cardano (ADA) fell 13%. Aptos (APT) bucked the trend, rising 9.11% on the day and reaching a record high of more than $6 billion in market value.

Over the past week, BTC has retreated sharply from its all-time high of more than $73,000. Although the price of the currency rebounded 10% on Wednesday with the support of the dovish Federal Reserve, it fell for several days and the crypto market entered a period of adjustment.

“It’s going to take us a while to get to $73,000 again,” Mike Novogratz , CEO of digital asset investment firm Galaxy Digital, said during a panel discussion at Bitcoin Investor Day in New York on Friday morning.

Spot Bitcoin ETF Inflows Slow

The weak BTC price action comes as U.S.-listed spot Bitcoin ETFs have seen net outflows for four consecutive days. The combined inflows from several new products were not enough to offset the massive outflows from the Grayscale Bitcoin Trust ( GBTC ). On Thursday, GBTC saw $359 million in outflows, leading to $94 million in outflows from similar products. Fidelity’s Wise Origin Bitcoin Fund (FBTC) saw a record low daily inflow, according to data compiled by BitMEX Research.

According to data from The Block data dashboard, on March 18, GBTC's daily outflow reached a record high of $642.5 million, and the total outflow between March 18 and March 21 was $1.84 billion.

So far this week, spot Bitcoin ETFs have recorded outflows of more than $830 million and are on track to experience their second weekly net outflow since BTC corrected to $39,000 in late January.

Genesis appears to be selling its GBTC shares to buy Bitcoin

Eric Balchunas, senior ETF analyst at Bloomberg, believes that GBTC’s outflows this week may have been caused by Genesis .

He said on X platform: "In the past 5 days, nine new Bitcoin ETFs have absorbed about $1.2 billion and the price has fallen by 8%. GBTC did have outflows, but it was mainly Genesis (we know this), they just exchanged GBTC shares for spot BTC, so it was a net neutral event (plus GBTC was all pre-ETF funds). Added together, ETFs have been net buyers of Bitcoin (in fact, new funds did not flee, and in fact more funds flowed in). As usual, when it comes to selling, it generally comes from within."

Analysts at Coinbase also noted that part of the increase in GBTC selling could be due to Genesis selling shares during bankruptcy proceedings. Once the sales are completed, the report said, ETF inflows could increase again due to favorable macro conditions and favorable central bank policies.

Coinbase analysts wrote: "We believe that the macro environment remains favorable for more Bitcoin ETF spot inflows after the Fed meeting on March 20. We expect the current US deflationary trend to remain unchanged, US financial conditions to remain loose, and the market to be supported by the Fed's withdrawal from the quantitative tightening program."

The pre-halving correction is not over yet, but investors are buying the dips

Willy Woo, Bitcoin analyst and managing partner of CMCC Crest , said in a post published on March 22 that investors are still buying the dip despite a larger sell-off in spot Bitcoin ETFs.

“ETF investors appear to be some new entrants,” he wrote. “On the first dip, ETFs saw $160 million outflows, while the Bitcoin network received $110 million in total net flows, implying a large number of self-custodial investors buying the dip.”

According to cryptocurrency analyst Rekt Capital, Bitcoin remains in pre-halving correction territory based on historical chart patterns.

“Bitcoin remains firmly in the ‘danger zone’ with historical pre-halving retracements occurring in the orange area of ​​the chart above. So when it comes to the downside, anything can still happen in the 26 or so days leading up to the halving,” he wrote in a March 22 post.