Bitcoin ETF Inflows Plummet Amidst Low Volatility

Bitcoin's price volatility has remained low in recent weeks, leading to a decrease in inflows into spot Bitcoin ETFs. This trend has raised concerns among investors and analysts, who are now closely monitoring the market for potential signs of a price reversal.

According to Julio Moreno from CryptoQuant, the demand for spot Bitcoin ETFs has halved this quarter compared to the same time last year. This significant shift in market sentiment is reflected in the net inflows, which have dropped from 100,000 BTC in Q1 2024 to around 41,000 BTC in Q1 2025. However, when viewed in dollar terms, the decrease in ETF inflows is less pronounced, with a minor drop from approximately $4.8 billion in 2024 to $4.3 billion in 2025. This suggests that while investor enthusiasm may be waning, the fundamental financial backing for Bitcoin remains stable.

Institutional sentiment has also reflected a cautious optimism, with the one-month basis of CME Bitcoin futures falling to levels last seen before the market's previous bullish phase. Vetle Lunde from K33 research noted that the one-month basis indicates a bearish sentiment, despite the current positive reading. This risk-averse atmosphere is further supported by low trading volumes and a lack of significant ETF flows, as observed by Lunde.

Bitcoin's price action over recent weeks has illustrated an extended period of low volatility, creating a compressed trading range that has rendered the market directionless. Despite this stagnation, BTC has not closed below $92,000 since mid-November, indicating a certain level of support. Prominent crypto traders, such as Jackis and Jelle, have likened the current price compression to that of August 2023, showcasing similar market conditions. The established trading range fluctuates between $106,000 and $91,500, prompting traders to maintain a watchful eye on potential breakout scenarios.

From a technical analysis standpoint, a daily close above $98,000 could signify a turning point for Bitcoin, potentially igniting renewed bullish momentum. The inability to close above this critical threshold since February 4 suggests a level of resistance that needs to be overcome for the bulls to regain control.