Bitcoin (BTC) has seen net outflows of $651 million from US spot exchange-traded funds (ETFs) since Feb. 10, raising concerns among traders about a potential drop below the $95,000 support level from the past 30 days. If this trend continues for another week, the spot Bitcoin ETF market could shrink by approximately $1.65 billion.
Despite these outflows, Bitcoin managed to push above $98,000 on Feb. 14, suggesting that bullish momentum is not entirely reliant on institutional investors. However, it remains unclear whether these movements were hedged, meaning that some entities may have simultaneously bought Bitcoin futures to offset the market impact of ETF sales.
To counterbalance ETF outflows, several companies, including Strategy (formerly MicroStrategy), Metaplanet, and KULR Technology, have increased their Bitcoin reserves. Even traditional financial institutions, such as Italy’s Intesa Sanpaolo, have recently added Bitcoin to their holdings. Additionally, the supply held by addresses with less than 1 BTC has been steadily increasing.
Bitcoin supply held by addresses with 0.1 to 1 BTC. Source: Glassnode
Wallets typically associated with retail investors—holding between 0.1 and 1 BTC—added over $80 million worth of Bitcoin between Feb. 3 and Feb. 13, reversing a two-week downtrend. This data further supports the notion that buying pressure is not coming exclusively from institutional investors.
A potential breakout above $105,000 could be driven by small retail traders, who, contrary to expectations, have yet to show significant optimism. Addresses holding less than 0.1 BTC have been net sellers since Jan. 31, according to Glassnode data, while Google searches for “Bitcoin” term have declined significantly over the past three months.
Google search trends for ‘Bitcoin’ term. Source: Google
Bitcoin search trends on Google peaked in mid-November 2024, coinciding with a 38% price surge in less than ten days. However, Bitcoin continued to rise by another $16,000 after that period, reaching an all-time high of $109,340 on Jan. 20, yet retail interest did not increase according to this metric.
Weak US economic growth could drive capital toward Bitcoin
Investor sentiment has been bolstered by strong corporate earnings, with the S&P 500 index trading within 0.5% of its all-time high. Notable examples include Exxon’s 10% year-over-year quarterly earnings growth, JPMorgan’s 12% increase in profits, and UnitedHealth’s 15% rise in quarterly earnings.
It is important to note that even a modest 2% gain in the S&P 500 translates into a $1 trillion increase in market capitalization. As a result, a small reallocation of capital from equities to Bitcoin could propel the cryptocurrency’s price above $105,000. Furthermore, concerns over corporate profitability are rising due to the ongoing global tariff war, increasing the appeal of uncorrelated assets like Bitcoin.
US retail sales fell 0.9% in January from the previous month, marking the sharpest decline in over a year, according to data released on Feb. 14. Jefferies US economist Thomas Simons reportedly told clients that, if similar data persists, first-quarter US GDP could turn negative, according to Yahoo Finance.
Related: Crypto bills stack up across the US, from Bitcoin reserves to task forces
Bitcoin’s upside has also been constrained by investor disappointment with the proposed US strategic Bitcoin reserves, initially backed by President Donald Trump, but still unrealized. Similarly, several state-level legislative proposals have focused on digital asset regulation rather than directly advancing Bitcoin reserves, creating uncertainty about government-led adoption.
Ultimately, the continued ETF outflows should be viewed as a bullish sign, considering Bitcoin has remained above $95,000 despite selling pressure. Additionally, deteriorating macroeconomic conditions and rising uncertainty in traditional markets could push investors to seek alternative assets, including Bitcoin.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
