Important points:
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Bitcoin’s decline reflects Nasdaq’s weakness, but lacks fundamental justification.
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Although spot BTC ETF inflows have cooled, they remain net positive, demonstrating the resilience of investor demand.
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Stablecoin liquidity and on-chain accumulation suggest conditions for a rebound.
Bitcoin (BTC) extended its decline to $102,000 on Tuesday, falling 7% this week, mirroring a 1.67% decline in Nasdaq 100 futures as risk assets came under pressure. According to data from EcoinBitcoin-Nasdaq, historically, if the Nasdaq declines by more than 1.5% in a day, Bitcoin has a 75% chance of posting a negative return, with an average decline of -2.4%.itcoin Nasdaq correlation by Ecoinometrics. Source:X
The analyst argued that despite the macroeconomic drag, Bitcoin price weakness is not fully justified by fundamentals. Financial conditions remain accommodative, and the stock market recently reached record highs.
“Bitcoin is undervalued relative to the macro environment,” Econometrics said, stressing that the current decline appears to be more sentiment-driven than structural.
However, inflows into Spot Bitcoin ETFs have slowed significantly since early October. Net inflows exceeded $5 billion in the first two weeks of the fourth quarter, while cumulative outflows over the past four weeks have been approximately $1.5 billion. Although this change suggests some cooling in demand, overall net inflows remain positive, indicating that long-term investor appetite for BTC exposure remains strong.
Globally, this slowdown is spreading across crypto exchange traded products (ETPs). Last week saw net outflows of $246.6 million from all crypto ETPs, primarily driven by Bitcoin outflows of $752 million. Notably, iShares Bitcoin Trust (IBIT) topped the list with $403 million in outflows, while Grayscale’s GBTC had $68 million in outflows.
On-chain metrics add nuance to the picture. Sell-side pressure eased from $835 million to $469 million week-on-week, but long-term accumulation remains strong. Bitcoin whales sent a modest inflow of approximately 4,900 BTC to the exchange. It’s not a sign of panic, but a sign of careful repositioning.
Reserves held on exchanges have declined to 2.85 million BTC, reinforcing the broader accumulation trend even as BTC trades below its 200-day moving average ($108,000) and short-term holder cost basis of $113,000.
Related: Long-term Bitcoin holder offloads 400,000 BTC: How far will BTC price fall?
Bitcoin liquidity signals tipping point
CryptoQuant data suggests that the stablecoin supply rate (SSR) has fallen to the 13-14 range, the same zone seen before Bitcoin’s rally earlier this year. Historically, this level has signaled a tipping point in liquidity, with an increase in stablecoin balances indicating an increase in “purchasing power” on the sidelines.
Bitcoin is currently trading at $102,200, and the low SSR suggests that stablecoin liquidity is quietly rising again, potentially setting the stage for a relief rally or the last bullish leg of this cycle.
However, each successive SSR rally has weakened, suggesting that while further upside is still possible, the market’s underlying liquidity momentum may be weakening.
Related: Bitcoin price hits $92,000 target as new buyers go into ‘surrender’ mode
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.