Bitcoin ETF Outflows Are a ‘Contrarian’ Buy Signal: Santiment

The recent streak of outflows from US-based spot Bitcoin ETFs, totaling more than $1 billion over the past trading week, suggests a potential buying opportunity for the world’s largest cryptocurrency, according to crypto sentiment platform Santiment.

“Santiment’s analysts read these flows as a counter-indicator, since ETFs disproportionately reflect retail conviction rather than smart money positioning,” Santiment said in a report on Friday.

Santiment said retail investors were losing patience after Bitcoin (BTC) failed to hold above $80,000 in May. Bitcoin is trading at $75,410 at the time of publication, after reaching as high as $79,052 on May 16, according to CoinMarketCap.

Santiment’s take contrasts with broader crypto industry view

The view contrasts with the broader crypto market narrative, where consecutive days of outflows from spot Bitcoin ETFs are often seen as a bearish signal and a sign of weakening retail sentiment that could point to further downside. However, Santiment argues the recent outflows instead resemble a healthy market reset.

Bitcoin is down 4.44% over the past 30 days. Source: CoinMarketCap

“Sustained ETF outflows have historically correlated with conditions favorable for patient accumulation rather than panic,” Santiment said.

Spot Bitcoin ETFs have recorded outflows across the past six trading sessions, with the 11 funds seeing a combined $1.26 billion in net outflows over just the last five days, according to Farside data. 

Bitcoin ETFs are going to pass all-time high inflows: Analyst

Some analysts anticipate the spot Bitcoin ETF outflow trend will reverse in the near term.

ETF analyst James Seyffart said on Michael van de Poppe’s podcast, “New Era Finance,” published on YouTube on Friday, that Bitcoin ETFs have now clawed back most of the $9 billion in outflows recorded between October and February.

Related: SEC’s Peirce tempers expectations over tokenized stocks exemption

“We’re around 60 billion inflows now since the ETFs’ launch. So, we’re almost at that all-time high peak,” Seyffart said.

“I think we’re going to pass it. And we have so many other ETFs coming to market,” Seyffart said.

Magazine: ETH bears growling, Tom Lee’s buying, XRP to ‘explode’: Market Moves