"Fleeing with money to the stock market"...Bitcoin (BTC) decline 'red flag' as retail investors leave

▲ Bitcoin (BTC)

Bitcoin (BTC) rebounded for four consecutive days, regaining the $62,000 level, but outflows from Bitcoin spot ETFs and investment capital moving towards the stock market have raised a red flag for its recovery.

According to crypto news outlet Benzinga on July 4 (local time), Bitcoin rose to $62,615, reaching its highest level since June 23. Its gain from this month's low is 8.7%, rising for four consecutive days driven by bargain hunting after falling more than 50% from its all-time high.

Bitcoin spot ETFs recorded a net inflow of $221 million on the 2nd, ending a 10-consecutive-trading-day outflow streak. However, last month's capital outflow expanded to $4.5 billion, marking the worst monthly performance since the approval of Bitcoin spot ETFs in 2024. As US investors continue to withdraw funds from cryptocurrencies, a trend of investment capital moving to the stock market has also been observed in Japan and Korea.

As major US stock market indices recently hit all-time highs, capital has flocked to stock ETFs. The Vanguard S&P 500 ETF (VOO) has increased its assets by over $90 billion this year, with total assets surpassing $1 trillion. Shares of Japan's Kioxia, South Korea's SK Hynix, and Samsung have also more than doubled this year.

Bitcoin rebounded from its year-to-date low of $57,828 to $62,823 but remained below its 50-day and 100-day moving averages. Benzinga suggested that bearish forces hold market dominance and that Bitcoin may be in the handle portion of an inverse cup-and-handle pattern. An analysis indicates that if the $58,000 support level breaks, it could further decline to $50,000.

The possibility of Strategy (MSTR) selling Bitcoin was also identified as a variable. Strategy hinted at the possibility of selling its Bitcoin holdings soon to increase its cash reserves, and when it sold 32 BTC in early June, Bitcoin fell below $60,000 for the first time in years. The potential for Strategy's sale to trigger sales by other Bitcoin-holding companies was also presented as a major market risk factor.

[Article Key Summary]

-Bitcoin rose for four consecutive days to $62,615, but $4.5 billion flowed out of Bitcoin spot ETFs last month.

-The trend of US and Asian investor funds moving to the bullish stock market has been identified as a burden on Bitcoin's recovery.

-The breakdown of the $58,000 support level and the possibility of Strategy selling Bitcoin were presented as additional downside risk factors.

*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.*