ecoinometrics

Bitcoin’s recovery just got an important confirmation from ETF demand. • Bitcoin ETFs have now recorded six consecutive days of inflows. • Total ETF holdings are only about 37K BTC below their all-time high. • This rebound in holdings is much stronger than the failed recovery of May. Our take: Bitcoin’s move above $80K is backed by persistent demand instead of price momentum alone. That gives the current recovery a much stronger foundation.

Bitcoin is running with only one engine right now: • ETFs are carrying the demand • Corporate buying has largely stalled • Strategy is still below its usual pace That’s why even if the recovery persists it is more fragile than when there was a more diverse set of buyers. https://t.co/WFmMXq4G8j

Three days of outflows for the Bitcoin ETFs: • That’s not a lot but it does interrupt the strong inflows sequence • That weakens the support above $75K • But could reverse after the FOMC meeting What’s clear is that the narrative around the debasement trade can only go so far when interest rates continue to climb.

FOMC meeting next week: • hawkish bias given the inflation trend • ~60% chance of a rate hike • the market sees the Fed Funds rate at 4.3% within six months Feels like headwinds coming for Bitcoin. https://t.co/AisjEKSHNX

Bitcoin just had its strongest streak of inflows in a long time: • 9 straight days of inflows • a total that rivals bull markets • strong support for the breakout This is close to the ideal situation if you expect the start of a recovery. https://t.co/JSaGLQNnaM

Bitcoin ETF demand has changed direction. So far this month, inflow days have outnumbered outflow days by roughly 3 to 1. That’s a very different market from the one we’ve had over the past few months. https://t.co/03zMrd0S5f

Bitcoin’s ETF demand has gone through one of its biggest changes in months. The relentless selling has stopped. Bitcoin no longer has to fight persistent waves of ETF outflows. That change alone is enough to strengthen the $60,000 level as a support. https://t.co/kSdQH691bP

Strategy recently sold around 3600 BTC. So should Bitcoin investors worry that one of the market’s biggest buyers has become a seller? Maybe, but the chart below helps put those sales into perspective, they are still tiny relative to Strategy’s holdings. https://t.co/uJgHnmG48b

Bitcoin has been holding around $64K with a few days of positive ETF flows. At first glance that sounds encouraging. But honestly zooming out on the chart showing the trend in the Bitcoin ETF holdings, we are not convinced the demand picture has materially changed. https://t.co/dzqEGEAgfI

Bitcoin is back above $60K. But one day of ETF inflows doesn’t change the bigger picture. Since May, every attempt to rebuild sustained demand has failed. The chart below is why we’re still cautious. https://t.co/v03KtJl3Z3