BlackRock's Bitcoin ETF Sees Record Trading Volume Amid $1 Billion Outflow

Record Trading Volumes Amid Outflows

Last week, BlackRock's spot bitcoin (BTC) exchange-traded fund (ETF) faced a significant downturn, with prices declining by over 11%. This decline coincided with a notable increase in trading volumes, reaching the highest levels since mid-November, according to TradingView.

Over 331 million shares of the ETF, trading under the IBIT ticker on Nasdaq, changed hands as the fund's price fell below the January support level of $50.69, ultimately sliding to $46.07, marking its lowest point since early November.

Market Reactions

This development has been disappointing for bullish investors, as traditional market wisdom suggests that price movements must be validated by trading volume. A bearish price action is often seen as more credible when accompanied by a significant increase in the number of shares traded.

Data from Farside Investors revealed that investors withdrew over $1 billion from the ETF amidst the price decline and a shrinking CME futures basis, which indicates the return on carry trades. This led to panic selling, affecting other U.S.-listed ETFs as well.

Despite these challenges, IBIT remains the largest ETF globally, boasting $39.6 billion in assets under management.

Trading volume surged last Tuesday as IBIT broke below the horizontal support at $50.69, signaling potential further losses ahead. The technical outlook remains bearish as prices continue to stay below the former support-turned-resistance.