Bitcoin ETF Inflows Turn Positive Amid Steady Accumulation: What to Expect?

Bitcoin ETF flows have for the last few months, been a decent yardstick for measuring the state of the market. Unsurprisingly, the uncertainty in the market triggered significant outflows and ETFs have been reluctant to enter back into market.

This week has brought forth some good tidings, with positive ETF flows testing the waters. Bitcoin ETF flows have been positive since 14 March, which was around the same time that Bitcoin price action achieved some recovery.

Although the lower BTC prices offer a much more attractive entry point, recent inflows have been relatively low. Especially compared to large flows observed when the market sentiment was in extreme greed.

The latest Bitcoin ETF flows are a reflection of the prevailing market sentiment. Although there has been some recovery, the risks of more downside remain real especially on account of shaky economic grounds.

Quantitative easing could inject confidence back into Bitcoin and ETFs

The slight recovery this week may also be courtesy of the Federal Reserve’s latest meeting. FED chair Jerome Powell revealed that the policy interest rates will remain unchanged.

The market reacted positively to the announcement since quantitative tightening will no longer be taking place. This means liquidity conditions may stabilize, with prospects that the FED could potentially cut rates in May.

However, Powell noted that inflation was still slightly elevated although it was close to the 2% long term target. The statement confirmed that financial markets are leaning towards stability, which a step in the right direction for risk-on assets such as Bitcoin.

According to Powell, Trump’s tariffs have contributed substantially to the elevated inflation. He also noted that it might be difficult to quantify just how much of an impact the tariffs are causing.

Nevertheless, this means tariff wars may continue to have the markets in a choke-hold. In other words, Bitcoin and the rest of the market may react positively if the tariff wars cool down.

Are investors re-accumulating Bitcoin after its latest dip?

Bitcoin at its $86,067 press time price tag was only an 11% premium from its lowest price point so far this year. While this may suggest that recovery has been slow, relative to its November 2024 performance, exchange data offers a different perspective.

A recent CryptoQuant analysis highlights the state of accumulation. The analysis noted that there was a sharp uptick in the 90-day moving average of BTC’s exchange netflow chart, indicating the highest exchange outflows since January 2023.

The analysis signals that there was robust accumulation but likely from the retail segment. This is because whale and institutional activity remained relatively restrained on account of the market uncertainty.

The above observations track with Bitcoin exchange reserves which saw a bit of an uptick in February. However, the same metric regained its downside and has since ticked lower than its bottom in February.

Bitcoin net unrealized profits have also been rising since 10 March. This is confirmation of the aforementioned accumulation.