US Spot-ETF Market Snaps Two-Day Outflow Streak
Rising bets on a June Fed rate cut bolstered demand for US BTC-spot ETFs, which saw $15.1 million in net inflows on February 13. While inflows were modest, ending a two-day losing streak lifted sentiment. Despite snapping a two-day daily outflow streak, the broader weekly outflow trend extended to four weeks in the reporting week ending February 13, limiting BTC’s gains.
According to Farside Investors, key flows for the reporting week ending February 13 included:
- iShares Bitcoin Trust (IBIT) saw net outflows of $234.8 million.
- Fidelity Wise Origin Bitcoin Fund (FBTC) had net outflows of $124.7 million.
- Grayscale Bitcoin Trust (GBTC) reported net outflows of $77.0 million.
- In total, six ETF issuers reported weekly net outflows, compared to five ETFs with weekly net inflows.
Despite reclaiming $70,000, the four-week outflow streak has weighed heavily on BTC, which has tumbled 19.74% year-to-date. Importantly, the spot ETF flow trends support a bearish short-term outlook.
Bitcoin and the US Economic Calendar: GDP, Inflation, PMI Data, and the Fed in Focus
Looking at the week ahead, US economic data will influence risk sentiment following the market response to the US CPI report.
On Wednesday, February 18, the FOMC Minutes will give further insight into the Fed’s policy outlook. Fed Chair Powell downplayed the likelihood of a near-term rate cut, citing a resilient labor market and elevated inflation. However, a willingness to cut rates if inflation eases would boost risk appetite, given January’s inflation figures.
However, Friday, February 20, is likely to be pivotal for BTC’s near-term price trends. The US Personal Income and Outlays report, Services PMI data, and Q4 GDP numbers will influence market sentiment toward the Fed rate path.
A larger-than-expected core PCE price index reading for December and a pickup in service sector activity in January would temper bets on a June Fed rate cut, weighing on demand for BTC. However, a lower GDP print could overshadow the Personal Income and Outlays report, potentially giving the Services PMI a greater weighting.
Beyond January’s headline Services PMI, traders should consider price trends. Softer input and output prices would align with January’s CPI report, supporting a more dovish Fed policy stance.
US economic data in line with forecasts would reinforce the bearish short-term outlook. Nevertheless, optimism that the US Senate will eventually pass the Market Structure Bill affirms the bullish medium-term outlook for BTC.
Bitcoin Fear & Greed Index Signals Bearish Sentiment
Despite reclaiming $70,000, the Bitcoin Fear & Greed Index remains within the Extreme Fear zone. The Fear & Greed Index fell from 9 to 8 on Sunday, February 15. Despite rising from 7 on Sunday, February 8, the Index continued to reflect extreme bearish sentiment. Typically, these conditions signal a price recovery, reinforcing the bullish medium-term outlook.