According to CryptoPotato, Bitcoin is potentially entering its fifth consecutive negative weekly close, a pattern historically associated with bear market conditions. The pattern was noted by Twitter user MisterCh0c, who faced criticism from more optimistic followers. They pointed out that the current drawdown, which has been ongoing throughout April, is mild compared to previous bull markets.
Bitcoin closed at a weekly high of approximately $71,400 on March 31, and closed this Sunday at roughly $63,000, marking a 12% drop. Lead Glassnode analyst James Check supported this observation, stating that Bitcoin has only declined by a maximum of 20% from its high of $73,000 this cycle. In contrast, the 2017 bull market saw multiple drawdowns ranging from 20% to 30%.
Despite these pullbacks being typical for a bull market, many are surprised that the selling pressure on Bitcoin has extended to the newly launched Bitcoin spot ETFs. These funds have absorbed over $12 billion of net inflows since January, but these flows have stagnated over the past month. Outflows from the Grayscale Bitcoin Trust (GBTC) have often exceeded inflows to all other Bitcoin ETFs combined.
Macro investment analyst Jim Bianco suggests that the dominant buyers of Bitcoin ETFs are 'degen retail' investors. He argues this is a bearish sign, as these investors are likely to 'bail at the first signs of trouble', especially when the price falls below their cost basis of $58,000. However, Bloomberg ETF analyst Eric Balchunas counters this by noting that most investors have not yet reported their ETF holdings in 13F filings. He also points out that it can take time for advisors to get involved, as evidenced by BITO, the Bitcoin futures ETF, which has 40% of its investment holdings owned by advisors after 30 months on the market.
