Over the past week, Bitcoin has been experiencing intense movement, with its price falling sharply from around $84,000 to around $60,000, representing one of the largest weekly declines in the market to date. Currently, real-time market data shows that the Bitcoin price has rebounded slightly to around $70,000, indicating some degree of market resilience.
Institutional Retreat: Despite the rebound, Bitcoin’s risks remain in the red zone.
According to CryptoQuant analyst Amr Taha, recent on-chain and institutional flow data is signaling risk-off warnings about Bitcoin’s price action as investors from various classes continue to reduce their exposure to the market. On the topic of caution, this data comes from three key indicators: exchange-traded fund (ETF) outflows, which depict institutional behavior; UTXO exchange inflow, Multi-asset inflows on Binance exchange.
In general, positive net flows for Bitcoin spot ETFs are bullish, indicating increasing buying pressure from U.S. institutional investors. However, recent developments show the exact opposite, especially with increasing withdrawals from IBIT from BlackRock, the most dominant player in the market.
Analyst Amr Taha said IBIT experienced two major outflows in the past week. The first event occurred on February 2, when investors repaid $4.7 billion, followed by $7.7 billion on the 5th, for a total return of over $12.4 billion. Additionally, Grayscale’s GBTC reportedly recorded an outflow of $2.1 billion during this period.
Exchange activities reinforce risk aversion behavior.
Ama Taha used data from UTXO Exchange Inflow SMA 7D to highlight the increase in Bitcoin inflows to exchanges over the week. On February 4th, BTC exchange inflows into Shark/Dolphlin wallets exceeded 14,900 BTC and increased to 20,800 BTC the next day. This marks the first time the indicator has reached 22,800 since October, when BTC was trading above $122,000.
However, as more Bitcoin is being sent to exchanges, stablecoins such as USDT are flowing out. Net flows of Bitcoin increased to $727 million, reaching levels last recorded in mid-November, according to Binance exchange inflow data on February 5. Meanwhile, USDT recorded negative net flows totaling $450 million.
These developments show that institutions are reducing their holdings while also exiting retail holders, creating a “risk-averse” environment favoring safety in a highly cautious market. While this does not confirm a further market downturn, it does suggest that there is a strong bearish sentiment prevailing among the investor class. At press time, the leading cryptocurrency is trading at $68,513 after falling 15.94% over the past seven days.
Featured image from Pexels, chart from Tradingview
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