Bitcoin Price Falls as On-Chain Data Shows Lagging Accumulation and Spot ETF Outflows

Bitcoin's price decline today is attributed to on-chain data indicating a lag in BTC accumulation compared to the asset's issuance, alongside outflows from the spot BTC ETF.

Source: www.cnbc.com

Bitcoin's price has experienced a notable decline, down 23% from its all-time high of $73,835 on March 14, reaching a two-month low of $56,500 on May 1. Analysis from Markets Pro and TradingView indicates that the cryptocurrency has been in a downtrend for nearly 60 days, suggesting a potential change in market sentiment as more traders opt to secure profits. Let's examine the factors contributing to the decline in Bitcoin's price today.

Bitcoin Holders Are Accumulating Less Contributing To The Downward Pressure on Its Price

Bitcoin's price has stagnated since the initial post-halving correction, creating attractive buying opportunities for late investors. However, data indicates that Bitcoin accumulation has not kept pace with the rate of BTC issuance. Over the last 30 days, all investor cohorts have accumulated just over 10,000 BTC, while 19,000 BTC has been issued during the same period.

James Van Straten, the lead analyst, noted that this phenomenon has occurred for the second time in recent months, with the previous instance in March coinciding with a 17% BTC correction between March 14 and March 19. The accumulation trend score cohort, which evaluates the quantity of BTC accumulated by different investor cohorts over the past 15 days, reinforces a similar narrative.

Following robust accumulation leading up to March, which drove BTC to its all-time high, all cohorts began selling off their assets shortly afterward. This distribution trend has persisted, with recent data from March showing no signs of change. According to the IOMAP chart, more than 46.66 million Bitcoin addresses are currently in profit, indicating that sell-side pressure will likely increase due to profit-taking, putting downward pressure on the BTC price.

BTC IOMAP chart. Source:IntoTheBlock

Bitcoin ETF Flows Have Once Again Turned Negative

Investors' risk-averse behavior is evident in the spot Bitcoin exchange-traded funds (ETFs), where traders are once again withdrawing their capital. Following two consecutive days of positive net flows, data from Farside Investors indicates that U.S.-based spot Bitcoin ETFs experienced outflows totaling $15.7 million on May 7.

The primary driver behind the ETF withdrawals on May 7 was the Purpose Bitcoin ETF, which saw net outflows of $15.7 million after experiencing its first net flows in 78 days on May 3. Meanwhile, inflows into other Bitcoin ETFs have been slowing down. BlackRock's iShares Bitcoin Trust (IBIT), for example, has seen stagnant inflows since April 24, with only minor inflows occurring on May 3 and May 6.

Disclaimer: FameEX makes no representations on the accuracy or suitability of any official statements made by the exchange regarding the data in this area or any related financial advice.