Bitcoin (BTC) has dropped more than 10% from its recent high, signaling reduced interest in Bitcoin ETFs. Experts at JPMorgan Chase & Co. believe the downturn could worsen.
This week, 10 Bitcoin ETFs might record their biggest withdrawal since launching on January 11.
At the time of publishing this post, Bitcoin is trading below the $63,000 mark, and the technical charts indicate more downward potential in the short term.
Meanwhile, Bitcoin is heading towards one of its worst weeks this year, with a 4% decrease already noted.
JPMorgan’s team warned that Bitcoin is “overbought.” They had predicted a potential fall before April’s halving event, which will slash the supply of new Bitcoin.
A key warning for Bitcoin’s price is the ongoing interest in CME Bitcoin futures combined with falling ETF investments, as strategists led by Nikolaos Panigirtzoglou noted.
They pointed out a significant slowdown in net investments into Bitcoin ETFs, with notable withdrawals last week.
This situation questions the expected continuous inflow into these ETFs.
As the halving event nears, selling is likely to keep up, especially as the market remains overbought despite the recent correction.
The bank had predicted Bitcoin’s price might fall to $42,000 after April as the initial excitement fades.
Between Monday and Thursday, ETFs saw a net outflow of $836 million, largely from the Grayscale Bitcoin Trust, and reduced investments in competitors like BlackRock Inc. and Fidelity Investments.
Funds have attracted $11.3 billion in net investments
So far, these funds have attracted $11.3 billion in net investments, one of the most successful ETF launches, according to Bloomberg.
Yet, the Grayscale Bitcoin Trust has experienced $13.6 billion in withdrawals.
Even though Bitcoin hit nearly $73,798 on March 14, investor enthusiasm seems to be cooling, according to Naeem Aslam of Zaye Capital Markets.
Aslam mentioned the rally’s lack of momentum since reaching its peak, causing doubts about its strength.
With the halving event close, the absence of momentum may lead to a significant drop, possibly below $50,000.
This situation underscores the volatile nature of cryptocurrency investments and the impact of market sentiment and regulatory actions on Bitcoin’s value.