Bitcoin (CRYPTO: BTC) plunged toward $68,000 Friday, breaking its recent recovery trend. But Bloomberg ETF analyst Eric Balchunas isn't hitting the panic button. Speaking with crypto commentator Scott Melker, he argued that relatively modest institutional outflows suggest investors are holding firm despite the selloff.
The numbers back him up, at least in relative terms. Bitcoin ETFs have seen $1.4 billion in year-to-date outflows, which Balchunas called encouraging even as Bitcoin sits roughly 50% below its $126,000 peak.
“You’re holding your ground. You’re treading water in a year that sucks,” Balchunas said.
He noted that ETF flows typically follow Bitcoin's price movements and compared its current weakness to gold ETFs' prolonged stagnation before they eventually reached new highs. In other words, weak sentiment doesn't necessarily undermine Bitcoin's long-term adoption story.
Could Bitcoin's $67,000 Support Trigger A Recovery?
Melker, meanwhile, focused on the charts. He highlighted Bitcoin's breakdown below $75,000, which disrupted the pattern of higher highs and higher lows established during its recent recovery. He identified several technical levels worth watching:
- $75,000: The former support level Bitcoin would need to reclaim to improve its market structure.
- $67,000: A potential support zone backed by previous consolidation.
- 200-week moving average: A key longer-term trend indicator that could help determine whether the broader recovery remains intact.
Melker warned that Bitcoin's break below its 50-week moving average adds to the technical uncertainty. Still, he suggested the $67,000 region could attract buyers given its historical trading activity.
Bitcoin ETFs Are Changing How Investors Hold BTC
Balchunas also highlighted roughly $3.6 billion in recent spot-to-ETF conversions, a signal that holders are shifting from self-custody toward regulated investment products. ETFs offer convenience, institutional custody and oversight, he said, but they lack Bitcoin's censorship resistance and the independence that comes with self-custody.
That's a trade-off worth understanding. Investors should distinguish between Bitcoin's underlying network and the exchanges or custodians that hold assets on their behalf. The network keeps humming along; the wrapper around it is a different story.
