to leave a comment.
▲ Bitcoin Spot ETF
The virtual asset market collectively showed a downturn amid concerns over a sharp decline in inflows into Bitcoin (BTC) spot exchange-traded funds (ETFs) and reduced liquidity. The diagnosis is that the slowdown in institutional buying for three consecutive days, coupled with the stagnation in stablecoin supply, is threatening the overall market's support level.
According to BeInCrypto, a virtual asset media outlet, on September 28 (local time), the daily net inflow into Bitcoin spot ETFs plummeted by 81% from its peak of $998.95 million on September 21 to $190.65 million on September 24. Inflows sharply decreased for three consecutive trading days, recording $714.75 million on September 22 and $346.98 million on September 23. Although net inflows from institutional funds are still maintained, the noticeably slower pace of inflows has weakened the market's upward momentum.
Institutional investors' wait-and-see attitude intensified ahead of the release of the U.S. August Personal Consumption Expenditures (PCE) price index on September 30. The desire to avoid macroeconomic uncertainty before the announcement of this inflation indicator, which will reflect changes in measurement methods, led to reduced buying. Concerns that the Federal Reserve's (Fed) monetary policy path could be shaken depending on the inflation data results stimulated a market-wide sentiment for cash preservation.
Stablecoin liquidity, which serves as idle funds in the market, is also below previous peak levels. According to DeFiLlama's aggregation, the total stablecoin supply is $312.3 billion, which is $8.6 billion short of the high recorded on May 17. After falling to $305.2 billion on August 3, it showed a moderate recovery, increasing by 0.9% this week. However, it is pointed out that the liquidity buffer is still insufficient to fully absorb selling pressure given the thin trading volume over the weekend.
From a technical perspective, defending the key support level of the total virtual asset market capitalization has emerged as a critical turning point. Experts analyze that maintaining the total market capitalization above the previous rebound low of $2.79 trillion is paramount. This is because maintaining this support level is necessary to pursue the recapture of the $2.95 trillion mark, where the uptrend faltered on September 23, after passing the primary recovery target of $2.89 trillion. If the $2.79 trillion level collapses, further downward correction is expected.
In the altcoin market, a sell-off due to profit-taking emerged after a sharp rise. Bitway (BTW) plummeted approximately 14% to the $0.92 level within 24 hours amid slowing trading volume immediately after hitting an all-time high of $1.09. The key factors are whether the major support level of $0.89 is defended and whether a bullish flag pattern is completed through an upward breakout of $0.97.
The combination of adjusted institutional fund inflow speed and a lack of idle liquidity is increasing overall fatigue in the virtual asset market. Market attention is focused on whether the virtual asset market, currently at key support levels, can revive its rebound momentum around the time of the U.S. inflation data announcement.
[Article Key Summary]
-Daily inflows into Bitcoin (BTC) spot ETFs plummeted by 81% from $998.95 million to $190.65 million.
-Stablecoin supply is $8.6 billion short of its May high, with thin trading volume fueling the decline.
-The defense of the $2.79 trillion support level for the total virtual asset market cap has been identified as a critical turning point for the market's future.
*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.*
Newsletter
Get key news delivered to your email every morning
to leave a comment.