Bitcoin ETF Bleeding Persists as US Inflation Data Fails to Ignite Markets

Despite US inflation data coming in below expectations, crypto markets failed to gain the desired momentum; Bitcoin erased last week's gains, falling below the $63,000 mark, while spot exchange-traded funds (ETFs) recorded outflows for two consecutive days for the first time since late July.

Capital Flight from ETF Funds and Market Caution

The capital outflow in spot bitcoin ETFs continues to weigh on market sentiment. According to SoSoValue data, investors withdrew a total of $192 million from the products, signaling a short-term dip in risk appetite for digital assets.

■Bitcoin lost 1.14% in the last 24 hours, trading at $62,818.35.

■ETF outflows marked the first consecutive two-day decline since late July.

■Ether (ETH) retreated to $1,875.54 with a 0.73% drop, while the altcoin market attempted to show resilience against major cryptocurrencies.

Aggressive Short Positions in Derivative Markets

Futures and funding data clearly indicate that investors are shifting to bearish positions, particularly in altcoins like Bitcoin Cash (BCH) and Hedera (HBAR). Market makers see preparations for deepening selling pressure in these coins.

■Bitcoin Cash (BCH) saw its Open Interest (OI) in futures increase by 10% to 1.64 million tokens, even as the spot price dropped by 3%.

■Negative annualized funding rates and negative CVD in BCH indicate aggressive short position entries.

■HBAR exhibited the most distinct downtrend, with funding rates falling to around -20%.

■On the Bitcoin side, although OI rose to 765,000 BTC, the price decline persisted.

Volatility Cools and Option Flows Remain Mixed

Uncertainty in the market is reflected in volatility indices, while investors continue to focus on extra yield strategies. Bitcoin's 30-day implied volatility index (BVIV) fell below 36%, erasing the rise seen at the beginning of the week.

■On Deribit, $70,000, $69,000, and $67,000 call options for Bitcoin were among the most preferred.

■On the Ether side, $1,700 and $1,780 put options garnered interest.

■Cosmos (ATOM) stood out with a gain of over 10% and a volume increase of 232%, while Fetch.ai and Monero showed positive divergence.

Despite price movements, the rise in Open Interest (OI) continues; this indicates that new short positions are being opened even within the downtrend, preparing for liquidations. A close below the $63,000 support in Bitcoin could trigger a slide towards Fibonacci correction levels in the $58,000 - $56,000 band. The price, slipping below the Ichimoku cloud, needs a strong catalyst for upward momentum in the short term. Algo-trading flows currently signal that aggressive shorting strategies are taking precedence over "buy the dip" approaches.