Spot Bitcoin ETFs Snap Outflow Streak, But Can Bulls Trust This $562 Million Turnaround?

Sometimes, the market throws you a bone just to see if you'll chase it off a cliff. After four straight days of outflows that had Bitcoin maximalists clutching their cold wallets in existential dread, US spot Bitcoin ETFs have finally snapped back with a $562 million daily inflow, the largest since mid-January. The timing could not be more ironic. This influx comes on the heels of Bitcoin decisively losing the vaunted $80,000 support and sliding into the $74,000 zone, a level not seen since last autumn’s ETF launch euphoria. The question on every desk right now: is this inflow the first sign of real demand returning, or just a dead cat bounce engineered by ETF market makers and a few brave dip-buyers?

The numbers are stark. According to The Block, Monday’s ETF inflows ended a brutal four-day streak of outflows that had cumulatively drained over $1.2 billion from spot Bitcoin products. The reversal is eye-catching, but context matters. During the outflow period, Bitcoin’s price tumbled nearly -8%, with the market absorbing a barrage of negative headlines: weak US spot demand, a surging loss rate (now at a 10-month high, with 44% of supply underwater), and leveraged longs getting liquidated with the kind of violence usually reserved for meme stocks on FOMC day. The Coinbase Premium Index, often a canary for US-based spot demand, remains negative, suggesting that even with the ETF inflow, the broader appetite for spot Bitcoin is still tepid at best.

ETF flows are the new market narrative, but they’re not the whole story. The mechanics behind these inflows are opaque. Are we seeing genuine institutional accumulation, or just short-term arbitrage and ETF basket creation to front-run a bounce? The timing, right after a sharp drawdown and amid persistent negative sentiment, raises eyebrows. The last time we saw a similar inflow spike, Bitcoin rallied briefly before sellers overwhelmed the order book again. The market’s collective memory is short, but not that short.

Zooming out, the ETF flows are only one piece of a much larger puzzle. The macro backdrop has turned less friendly. The Federal Reserve’s rate cut odds have been trimmed as US data stays hot, risk sentiment is fickle, and Asian equities are rallying on trade optimism that has little to do with crypto. Meanwhile, the loss rate on Bitcoin supply is now at 10-month highs, a classic late-cycle signal that capitulation may not be done. The Coinbase Premium Index, a favorite of quant desks, is still negative, US spot demand is not leading this bounce. And leveraged longs? They’ve just been wiped out to the tune of $1.15 billion in Ethereum alone, with Bitcoin not far behind. ETF inflows are nice, but they’re not a magic bullet when the rest of the market is still licking its wounds.

The real story here is the divergence between ETF flows and spot market sentiment. While ETF inflows are a welcome change, they’re not yet enough to reverse the broader trend. The market is still digesting a major liquidation event, and the technical picture remains fragile. Bitcoin is struggling to reclaim $80,000, and the next support sits uncomfortably close at $74,000. If ETF inflows continue, we could see a short-term bounce. But if spot demand doesn’t follow, this rally could fizzle just as quickly as it started.

Strykr Watch

Technically, Bitcoin is in no-man’s land. The $80,000 level, once a fortress, is now overhead resistance. Support at $74,000 is the last line before a potential slide to the low $70,000s. RSI on the daily chart is hovering near oversold territory, but not quite flashing a screaming buy. The 50-day moving average is rolling over, and the 200-day sits far below, offering little comfort for bulls. ETF inflows are the wild card, if they persist, we could see a squeeze back to $82,000. But if spot selling resumes, the path of least resistance is lower.

Liquidity is thin, with order books showing a distinct lack of bids below $75,000. Volatility is elevated, and options skew is leaning bearish, with puts outpacing calls at the $70,000 and $72,000 strikes. The market is jumpy, and any headline could trigger a cascade in either direction. For now, all eyes are on the ETF flows, if they dry up, expect another round of forced selling.

The risks are obvious. If ETF inflows reverse, or if spot demand fails to materialize, Bitcoin could easily test the $70,000 handle. A break below $74,000 would invalidate the bullish setup and open the door to a deeper correction. On the flip side, if ETF inflows accelerate and spot demand returns, we could see a sharp squeeze higher. But that’s a big if in this environment.

Opportunities exist for nimble traders. A long entry near $74,000 with a tight stop below $72,500 offers a favorable risk-reward if ETF inflows persist. On the short side, a rejection at $80,000 could be an invitation to fade the bounce, targeting a retest of the lows. Options traders may look to sell volatility, but only with defined risk, this market can move fast, and the next headline could change everything.

Strykr Take

This is a market that wants to believe, but doesn’t quite trust what it sees. ETF inflows are a positive signal, but they’re not enough to declare the bottom is in. The technicals are shaky, spot demand is still weak, and the macro backdrop is far from supportive. For now, treat this bounce as a trade, not an investment thesis. If ETF inflows keep coming, ride the wave. If not, don’t be the last one out when the music stops.