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▲ Bitcoin (BTC), decline / ChatGPT generated image
While over $1 billion has flowed out of US spot Bitcoin (BTC) ETFs, crypto analytics firm Santiment interpreted this not as a fear signal but as a contrarian buying signal. The analysis suggests that individual investors lost patience and started selling when Bitcoin failed to hold the $80,000 mark in May.
Cointelegraph reported on May 23 (local time) that over $1 billion flowed out of US spot Bitcoin ETFs in the past week, and Santiment assessed this as a Bitcoin buying opportunity. Santiment stated, “ETF fund flows are often read as a contrarian indicator because they overly reflect the confidence of retail investors rather than smart money positioning.”
Santiment presented a different perspective from the usual market sentiment that continuous outflows from spot Bitcoin ETFs are bearish signals. Santiment explained, “Consistent ETF outflows have historically correlated with an environment conducive to patient accumulation rather than fear.”
According to Farside data, all 11 spot Bitcoin ETF products recorded outflows for six consecutive trading days recently. The total net outflow over the past five days amounted to $1.26 billion. Bitcoin rose to $79,052 on May 16 but was trading at $75,410 at the time of publication.
ETF analyst James Seyffart predicted that Bitcoin ETF fund flows could reverse soon. Seyffart said on Michael van de Poppe's podcast that Bitcoin ETFs have recovered most of the $9 billion outflows that occurred from October last year to February this year.
Seyffart stated, “Currently, inflows since the ETF launch are around $60 billion, almost reaching an all-time high,” adding, “I expect it to surpass this. There are many more ETFs to come to the market.” While the ETF fund exodus stimulated short-term fear, Santiment interpreted it as a market reset period favorable for long-term investors.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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