Bitcoin Approaches ETF Cost Basis, Analyst: Inflows Slow but Support Strengthens

Recently, the price of Bitcoin has fallen back to just below the $90,000 mark, approaching the overall cost basis level of US Bitcoin ETFs, raising market attention regarding the strength of support. According to Glassnode data, since February last year, sustained ETF buying has provided key support during multiple downturn cycles, enabling Bitcoin prices to gain rebound momentum near the breakeven point.

Historical data shows that since 2024, Bitcoin has experienced two deep corrections of over 30%, occurring from March to August and from January to April 2025, both bottoming near the ETF cost basis. At that time, weekly net inflows for ETFs, as tracked by SoSoValue, were negative, which is quite similar to the current market situation.

Recently, Bitcoin has pulled back by about 28% from its October high of $126,000, gradually approaching the ETF cost range of around $83,000. Meanwhile, since early December, ETF weekly net inflows have once again turned negative, with a clear slowdown in market capital inflows. Currently, the price of Bitcoin fluctuates around $89,900, recovering somewhat from the early December low of $84,600.

As of now, US Bitcoin ETFs collectively hold about $117.67 billion worth of Bitcoin, accounting for approximately 6.55% of total supply, forming structural demand support and being viewed as a potential bottom area. However, there are still market questions about whether ETF demand is strong enough to hold the key $83,000 level.

Industry opinions are cautiously optimistic. BuyUCoin CEO Shivam Thakral stated that Bitcoin is currently in a strong support zone formed jointly by on-chain and ETF factors, and from historical data, the risk-reward is skewed to the upside. He emphasized that whether ETFs can resume net inflows in the next one to two weeks will be crucial, and macroeconomic sentiment must remain stable.

Market focus is on the upcoming US Federal Reserve FOMC meeting. The CME FedWatch tool indicates that a 25 basis point rate cut is almost certain, but the key question is whether this rate cut will signal the start of an easing cycle. CF Benchmarks CMO Mark Pilipczuk pointed out that if the Fed hints at another rate cut before June, it will bring more upside momentum to the market.

Analysts generally believe that if rate cuts help support economic growth, it will reinforce Bitcoin’s historical pattern of rebounding at support zones. However, if the Fed delivers a stronger hawkish signal, the current rebound expectations may be significantly limited. (Decrypt)