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Bitcoin Faces Potential Sell-Off if ETF Inflows Slow, Analysts Caution

Amid record inflows into Bitcoin ETFs in the U.S. last week, analysts are warning about possible price declines if demand weakens, according to a report by 10x Research.

Data from Farside Investors reveals that the 10 ETFs collectively attracted $2.6 billion in new investments during the five days ending March 15. The majority of these inflows occurred early in the week, propelling BTC to new highs, nearly reaching $74,000.

However, momentum tapered off towards the end of the week, with only $133 million and $198 million of net inflows recorded on Thursday and Friday, respectively. Consequently, Bitcoin experienced a sharp decline over the weekend, falling below $65,000.

Analysts, including 10x Founder Markus Thielen, have highlighted Monday and Tuesday as crucial days. Thielen noted in a report that a continuation of the correction is possible if ETF inflows fail to meet expectations following recent market volatility.

The report suggested, “While this is an unpopular narrative, it would be expected to see inflows slow down after prices experience significant intraday volatility.” Based on reversal indicators, Thielen proposed a retracement to $59,035, representing a 10% drop from current prices.

Despite the prospect of a deeper correction, the report maintains optimism about the broader crypto market’s trajectory.

“We can still argue that Bitcoin will climb materially higher during the next few months as this bull market will likely continue,” Thielen commented, emphasizing the significance of Bitcoin reclaiming the $70,000 threshold, which could open the door to further gains.

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