Bitcoin net outflow from centralized exchanges hits new high vs. massive outflow of funds from BTC investment products. Where is the way forward?

Bitcoin has experienced another sharp drop in the past 24 hours, with a daily drop of more than 12%. The last barrier of $30,000 is in jeopardy. Under the drastic price fluctuations, traders not only pay attention to the latest fluctuations in BTC prices, but also pay attention to the large-scale flows from various exchanges and Bitcoin investment products, which is now a major basis for judging the trend as a large number of institutional investors have entered the market.

Centralized exchanges saw the highest net outflow of Bitcoin in the year, but, on the other hand, Bitcoin investment products also saw huge outflows worth $141 million.

According to Glassnode data, Lex Moskovski, chief investment officer of Moskovski Capital, said this was the "largest net outflow this year", with a total of about 22,550 bitcoins flowing out of centralized exchanges. Based on the price of Bitcoin after the crash, this net outflow is still worth $750 million.

As shown in the above figure, similar large amounts of Bitcoin outflows from exchanges often affect price trends soon after. For example, in January, Bitcoin experienced a sharp rise after two large withdrawals. A similar situation also occurred in February. Therefore, the outflow of Bitcoin from centralized exchanges is often a price "barometer" for analysts. From this perspective, it is clear that Bitcoin still has a lot of room for improvement.

But according to the latest report from CoinShares, institutional enthusiasm for BTC is declining.

At the beginning of the article, we mentioned that BTC investment products have also seen outflows. CoinShares' documents highlight that Bitcoin-related investment products are experiencing "the largest single-week outflow in history", and negative sentiment is once again focused on Bitcoin, with total outflows reaching $141 million. The outflows accounted for 8.3% of the net inflows seen this year, which is still the smallest relative to the outflows in early 2018. "Investors are more cautious about investing in Bitcoin, which is also supported by a 50% drop in Bitcoin trading volume on trusted exchanges.

Therefore, after a month dominated by bearish sentiment in May, Bitcoin bulls did not see the dawn of losses, when the price of Bitcoin once fell to a three-month low of $30,000. According to the Bitpush terminal, the current price of Bitcoin has fallen below the lowest point two weeks ago. As of press time, the price of Bitcoin is $31,641.17, a daily drop of more than 12%.

Institutionally, British asset management company Ruffer made a net profit of more than $1.1 billion by investing in Bitcoin in five months. The company said that part of the reason for selling Bitcoin positions was that the epidemic ban was about to end and young people would not spend too much time trading Bitcoin.

Bitcoin’s price pressure comes not only from short selling, but also from its biggest competitor, Ethereum.

Also from the CoinShares report, at the end of May, more than 63% of institutional funds flowed into ETH, totaling $46.8 million.

Although the current Bitcoin air force has a tendency to be like a dark cloud looming over the city, there are still some bulls who still have hope for the subsequent trend of Bitcoin.

Bloomberg Chief Commodity Strategist Mike McGlone tweeted that the June 3-5 Bitcoin 2021 conference further confirmed that Bitcoin has transformed into a global digital reserve asset and is no longer a speculative cryptocurrency. In addition, as the supply of Bitcoin decreases and the supply of fiat currencies and the US dollar increases, if it follows Ethereum's growth model, Bitcoin may reach $100,000.