BTC Faces First Major Test Since Rally as ETF Flows Turn Negative
TREE NEWS reports: In a notable shift, prominent Chinese crypto investor Jiang Zhuoer has issued a warning that Bitcoin (BTC) is facing its first significant test since the recent rally. His comments come after Friday’s spot Bitcoin ETF data showed a net outflow of $202 million, ending a nine-day streak of inflows. Meanwhile, Ethereum spot ETFs continued to show strength with a net inflow of $102 million.
Market Dynamics and Selling Pressure
Jiang highlighted that after the substantial rally, the market now faces considerable selling demand from long-term holders who are finally breaking even and from early bottom-fishers taking profits. The critical question, he notes, is whether there is sufficient incoming capital to absorb this supply. He identifies ETF flows and the Coinbase premium as key indicators to monitor for capital absorption.
Macro Overhang and Fed Comments
The market was further pressured by hawkish comments from Federal Reserve Chair Warsh, which Jiang believes had a significant impact. These remarks contributed to the negative ETF data on the crucial Friday session and weakened weekend momentum. This macro overhang adds another layer of complexity to the current market conditions.
Jiang’s Response and Outlook
In response to the evolving situation, Jiang revealed that he has sold 50% of his ETH spot position during the decline. He views the early morning drop as potentially the beginning of a trend reversal rather than a mere correction. He plans to closely monitor weekend trading activity to gauge the market’s direction.
This cautious stance from a well-known investor underscores the growing uncertainty in the crypto market. While Ethereum’s ETF inflows remain positive, the broader market is now grappling with the dual pressures of profit-taking and macro headwinds. The coming days will be crucial in determining whether this is a temporary pullback or the start of a deeper correction.
