Demand for Bitcoin ETFs may increase when prices drop, a crypto analyst suggests
Amid Bitcoin's price decline, the Bitcoin ETF market has been gloomy recently. Despite these continuing declining net flows, Ki Yang Ju, a prominent analyst and CEO at CryptoQuant, predicts a resurgence in the Bitcoin ETF market.
In a March 22nd post on X, Ki Yang Ju shared that even if BTC prices continue to decline, Bitcoin ETF netflows are likely to rise. Using data from the network's historical trends, the analyst finds that demand for Bitcoin ETFs usually starts when the cryptocurrency enters certain support levels.
According to the data of the analytical firm BitMEX Research, these BTC ETFs have recorded a negative flow for the last four trading sessions. This situation was reflected in significant levels of Greyscale's GBTC flows and lower returns for other ETFs, particularly market leaders BlackRock IBIT and Fidelity's FBTC.
Young Ju said that new BTC whales, especially ETF buyers, have an on-chain price of around $56,000. This indicates that significant Bitcoin holders, especially ETF investors, bought most of the Bitcoin at an average price of $56,000.
Based on this pattern, the crypto expert expects significant inflows into the Bitcoin ETF market should BTC reach the specified price threshold.
According to data from Cointelegraph Markets Pro, the price of Bitcoin (BTC) fluctuated between $62,000 and $68,000 last week. However, Yang Joo points out that such a decline is plausible, as corrections often show a maximum decline of 30%. With BTC's recent high of $73,750, the analyst predicts that the price of the asset could drop to $51,000.
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However, in the last 48 hours, BTC price has dropped 13% from its new all-time high of $73,835, to briefly trade around $60,000. The correction occurred due to overheated market conditions, which analysts have dubbed a “pre-halving rebound” ahead of Bitcoin's halving event, which is about 30 days away.
The CryptoQuant report shows that the Bitcoin bull cycle is far from over, with relatively low investment flows from new investors and valuation metrics still at levels seen at previous market peaks.
Meanwhile, the upcoming Bitcoin halving event is expected to strengthen the BTC price, leading to a parabolic growth. According to CoinMarketCap's halving countdown, Bitcoin's next halving event is less than 31 days away.
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