ETF Inflows Nearly Halve as Bitcoin Slides Amid Market Caution

On Tuesday, Bitcoin exchange-traded funds (ETFs) recorded over $200 million in inflows. While this marked a net positive inflow into these funds, it also represented a sharp drop from the $421 million seen the day before.

The cooling interest comes as BTC slid to an intraday low of $103,371 on Tuesday, signaling growing caution among investors. If the decline persists, ETF inflows could weaken further, as institutional sentiment continues to take a hit.

BTC ETFs See Slump in Daily Inflows

On Tuesday, US-listed spot Bitcoin ETFs recorded net inflows of $216.48 million, indicating that investor interest remains intact. However, this marked a steep 47% drop from the $412 million posted the day before, signaling a slowdown in momentum.

The dip in inflows coincided with BTC’s price decline during the day’s trading session. It fell to an intraday low of $103,371 amid weakening demand. The downturn has weighed on market sentiment and appears to have stalled fresh capital from entering BTC-linked ETFs.

Yesterday, BlackRock’s IBIT led the pack with the highest daily inflows, totaling $639.19 million, bringing its total historical net inflow to $50.67 billion.

On the other hand, Fidelity’s FBTC witnessed the largest net outflow among these ETFs, with $208.46 million exiting the fund.

BTC Faces Renewed Pressure

Today, BTC has extended its downward trend, shedding another 2% as the broader crypto market faces renewed selling pressure. The price decline has been accompanied by a dip in the coin’s futures open interest (OI), suggesting a slowdown in leveraged trading activity.

This stands at $70.24 billion at press time, dropping by 3% over the past day. This pullback signals that traders are reducing their exposure and possibly closing out positions, a trend reflecting growing market caution.

BTC Futures Open Interest. Source: Coinglass

Open interest refers to the total number of outstanding futures contracts that have not yet been settled. When it falls during a price dip like this, it indicates that traders are exiting positions rather than opening new ones. This is a sign of weakening conviction and reduced speculative appetite among BTC futures traders.

Furthermore, bearish sentiment continues to dominate the options market, as evidenced by the heightened demand for put contracts over calls, per Deribit. This imbalance suggests that a growing number of traders are positioning themselves to profit from further downside in BTC’s price.

Bitcoin Options Open Interest. Source: Deribit

The combination of cooling ETF inflows, declining open interest, and a bearish tilt in the options market suggests that while institutional interest has not vanished, the drop in capital flows and trading behavior means many investors are gearing for further downside, or at least waiting for clearer signals before re-entering the market.