Over the past week, Bitcoin has experienced a wild move with its price plummeting from around $84,000 to around $60,000, one of the largest weekly percentage declines in the market today. Currently, based on live market data, Bitcoin price has recovered slightly to around $70,000, indicating some market resilience.
Financial institutions retreat: Despite the pullback, Bitcoin risks remain in the red zone
According to CryptoQuant analyst Amr Taha, recent on-chain and institutional flow data points to a risk-off warning for Bitcoin price trends, as different classes of investors continue to reduce their market exposure. The alarming data comes from three key indicators of institutional investor behavior: exchange-traded fund (ETF) outflows, and Bitcoin. UTXO exchange inflow, And the inflow of multiple assets to the Binance exchange.
Generally, positive net inflows into Bitcoin Spot ETFs are a bullish situation and indicate increasing buying pressure from US institutional investors. However, recent developments paint a contrary picture, particularly with increasing withdrawals from IBIT by BlackRock, the most dominant player in the market.
Analyst Amr Taha said IBIT experienced two large outflows last week. The first event occurred on February 2, when investors redeemed $4.7 billion, followed by $7.7 billion on the 5th, for a total of more than $12.4 billion. Additionally, Grayscale’s GBTC is said to have recorded $2.1 billion in outflows during this period.
Exchange activity strengthens risk-off behavior
Ama Taha also highlighted that Bitcoin inflows to the exchange increased over the week, using data from the UTXO exchange inflow SMA 7D. On February 4th, inflows into the Shark/Dofrin wallet on BTC exchanges reached over 14,900 BTC, rising to 20,800 BTC the next day. This was the first time the indicator reached 22,800 since October, when BTC was trading above $122,000.
However, stablecoins like USDT are being withdrawn as large amounts of Bitcoin have been transferred to exchanges. On February 5th, according to inflow data on the Binance exchange, Bitcoin net inflows increased to $727 million, reaching levels last seen in mid-November. Meanwhile, USDT recorded negative net flows totaling approximately $450 million.
These developments show that while financial institutions are reducing their holdings, individual holders are also exiting, creating a “risk-off” environment that prioritizes safety in a highly cautious market. While this does not confirm further market weakness, it does suggest strong bearish sentiment prevailing among the investor base. At the time of writing, the top-tier cryptocurrency is trading at $68,513 after falling 15.94% over the past seven days.
Featured images from Pexels, charts from Tradingview
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