Institutional interest in Bitcoin (BTC) has regained momentum, evidenced by a remarkable influx of over $970 million into exchange-traded funds (ETFs) within just three days. This surge comes at a time when Bitcoin’s price stands at $104,750.20 after experiencing a 2.67% daily drop, suggesting a renewed confidence among large investors. However, despite the positive signs of institutional appetite, the overall market sentiment remains mixed. One concerning trend is the declining liquidity in stablecoins.
The Exchange Stablecoin Ratio has plummeted by 3.34% to a current rate of 5.69. This reduction indicates diminished buying power and may weaken the potential for short-term price advantages. If stablecoin availability does not improve, the bullish momentum from ETF inflows could wane. Moreover, retail traders might remain hesitant to enter the market due to limited capital, placing the onus of price stability primarily on institutional players.
Additionally, BTC’s scarcity narrative appears to be losing ground. The Stock-to-Flow Ratio has declined sharply by 22.22%, now sitting at 706.78K. This drop suggests an increase in new supply or stress on circulation levels, both factors that could challenge bullish valuation models. While the long-term prospects remain positive, short-term uncertainties may dampen investor confidence.
Profit-taking behavior is also emerging, as indicated by the MVRV Ratio, which has decreased to 2.21, down by 3.08% in the last 24 hours. This trend suggests that holders are starting to sell, especially in a market where values above 2.0 often precede local tops. Further complicating the landscape, BTC’s Total Value Locked (TVL) in decentralized finance (DeFi) has decreased by 3.66%, now at $6.354 billion. This decline may reflect a broader risk-off sentiment among investors, potentially diminishing BTC’s role in decentralized ecosystems.
While ETF inflows indicate strong institutional conviction, a cautious atmosphere persists across various indicators. Stablecoin liquidity, valuation ratios, and DeFi engagement are all trending downward. For Bitcoin to extend its upward trajectory, these metrics need to align with the overall positive sentiment surrounding institutional investment.