Bitcoin ETFs attract $568M as analysts flag downside risk

US-spot Bitcoin exchange-traded funds saw their second consecutive week of net inflows, the first back-to-back weekly gains in five months.

However, even as institutional demand begins to recover, market analysts are concerned that the recent correction may not be over just yet.

According to data from SoSoValue, spot Bitcoin ETFs posted roughly $568.45 million in net inflows during the latest reporting week. 

The gains followed another positive week earlier, when the funds attracted about $787.31 million in new capital. 

Consecutive inflows mark the first time since late last year that the products have managed to sustain demand across two straight weeks.

The rebound comes after a prolonged period of investor withdrawals. Over the five weeks preceding the turnaround, spot Bitcoin ETFs recorded roughly $3.8 billion in cumulative net outflows. 

The largest weekly redemption during that stretch occurred in the week ending Jan. 30, when investors pulled about $1.49 billion from the funds.

Market observers have also pointed to the speed at which Bitcoin ETFs have accumulated capital since their launch. 

In a recent post on X, Blockstream marketing director Fernando Nikolić noted that Bitcoin ETFs have already matched roughly 15 years of cumulative inflows seen by gold ETFs in less than two years.

Nikolić argued that the milestone is particularly notable given the market backdrop.

Bitcoin reached the inflow milestone despite enduring a roughly 46% drawdown and several months of weak price performance.

“Bitcoin isn't trying to be gold. Bitcoin is making gold look slow,” he wrote.

Retail behaviour suggests Bitcoin price risks more downside

However, not everyone is convinced that the recent return of ETF inflows is enough to push Bitcoin back into a sustained bull run.

According to analysts at Santiment, recent on-chain activity shows a divergence between whale wallets and smaller investors, a trend that has frequently appeared during past market corrections.

In a report published Friday, the crypto sentiment platform said whales, defined as wallets holding between 10 and 10,000 BTC, had accumulated heavily between Feb. 23 and Mar. 3 when Bitcoin traded between $62,900 and $69,600.

Profit-taking began soon after the asset climbed back above the $70,000 mark.

Santiment noted that once Bitcoin approached $74,000 earlier in the week, large holders began trimming their positions.

“The moment Bitcoin hit $74k, these key stakeholders began taking profit,” Santiment wrote.

Data from the platform shows that whales have already offloaded roughly 66% of the Bitcoin they accumulated during the late February buying window.

At the same time, smaller retail participants have continued to increase their exposure.

“When retail buys while whales sell, it typically signals that the correction is not yet over,” Santiment said.

A similar view was shared by well-followed analyst Rekt Capital, who noted that Bitcoin is just 150 days into its current bear market.

“The shortest Bitcoin Bear Market lasted 365 days,” the analyst wrote in a recent X post.

Meanwhile, fellow analyst Crypto Rover pointed to sentiment indicators suggesting that the market may still be in the early stages of forming a bottom.

At the time of writing, Bitcoin was exchanging hands at $67,174.