Bitcoin’s price has experienced a notable decline, dropping below the $61,000 mark as the bearish momentum intensifies. A major contributing factor to this downturn is the continued outflows from the Grayscale Bitcoin Trust (GBTC) and other Bitcoin Exchange-Traded Funds (ETFs). 

On May 10, GBTC reported an additional $100 million in outflows, bringing the total outflows across all 11 Bitcoin ETFs to $84 million. This trend indicates a waning interest among investors in Bitcoin ETFs, putting further pressure on the market.

BTC/USD 24-hour price chart (source: CoinMarketCap)

Institutional Holdings and Market Sentiment

Despite the outflows, traditional banking institutions have disclosed their substantial holdings in Bitcoin ETFs, signaling a continued interest from institutional investors. JPMorgan, the world’s largest banking institution, revealed its diversified investment portfolio, including 25,021 shares of Bitcoin Depot Inc. 

Wells Fargo also reported its exposure, holding 2,245 shares of GBTC. These disclosures highlight a strategic interest in Bitcoin ETFs among major financial players, although recent outflows suggest a broader market hesitance.

Bitcoin Price Dynamics and Trading Activity

The price of Bitcoin has fallen by 3.5% in the past 24 hours, nearing a critical support level of $60,000. This decline follows a period of reduced buying interest, with on-chain data indicating a limited response to the “buy the dip” strategy. 

Insights from Santiment, an on-chain data provider, suggest that traders are exhibiting low confidence, as reflected in the decreasing social interest and mentions of Bitcoin across crypto-related social media channels. This subdued sentiment often signals prices nearing a bottom, though analysts advise monitoring social metrics for persistent Fear, Uncertainty, and Doubt (FUD) in the market.

Bitcoin’s recent price drop has been characterized by sudden volatility. On May 10, the price fell by more than $2,000 within an hour, resulting in significant long liquidations worth $127 million. This flash crash underscores the market’s current instability, with leveraged traders caught offside. 

Analysts like Michaël van de Poppe suggest that this period of low volatility and choppy price action is part of a final accumulation phase before a potential upward correction. However, failure to hold key support levels could cause Bitcoin to test lower ranges of around $52,000 to $55,000.

Investor Sentiment and Market Behavior

Despite the bearish trends, some Bitcoin ETFs have seen positive inflows. BlackRock’s ETF IBIT experienced an inflow of $12.4363 million, while Fidelity’s ETF FBTC saw an inflow of $5.3039 million. These contrasting flows suggest that while some investors are exiting their positions, others remain confident in Bitcoin’s long-term prospects. The divergence in investor sentiment points to a market still grappling with uncertainty, where the behavior of whales and institutional players could significantly influence future price movements.

As Bitcoin consolidates within a falling wedge pattern in the one-day time frame, the potential for a bullish breakout remains. Traders often interpret such patterns as signals of a trend reversal. 

If Bitcoin breaks out above the upper trendline of the wedge, it could signal the start of a new uptrend, with a profit target around $71,116 and possibly extending to $73,777 in a highly bullish scenario. The support level of $60,660 continues to hold on the weekly time frame, suggesting that the prevailing directional bias remains upward unless bears manage to flip the $55,473 support into resistance.