U.S. Bitcoin exchange-traded funds (ETFs) continue to buy up the world’s largest cryptocurrency, even as its price is pegged at just over $90,000.
This demand has, since February last year, limited the ability of ETFs to fall significantly near their total cost basis, or break-even point, according to data from Glassnode.
After 2024, two corrections of 30% or more bottomed out and reversed around their cost base, in March-August 2024 and January-April 2025. In both episodes, weekly ETF net inflows were negative. SoSoValue The data shows.
A similar setup is currently taking shape.
Bitcoin has fallen 28% from its October high of $126,000 and is approaching the ETF cohort’s cost basis of $83,000, while weekly net inflows since early December have also been in the red.
On the day, the asset fell 1.5% to $89,900, reversing losses from the Dec. 2 bottom of around $84,600.
US ETF products currently hold $117.67 billion in Bitcoin, representing about 6.55% of total asset supply, creating a structural bid that could act as a major demand zone.
Still, the current tension centers on whether ETF demand is strong enough to establish a floor at $83,000 and send the market higher.
“Bitcoin sits in a strong on-chain and ETF support cluster where the risks and rewards historically favor upside,” said BuyUCoin CEO Shivam Thakral. decryption. “A sustained recovery will depend on new ETF inflows and macro stability over the next 1-2 weeks.”
All eyes are on Wednesday’s FOMC meeting, with a quarter-point rate cut almost certain, according to CME’s FedWatch tool.
The key question is whether the latest rate cut signals a confident step toward easing, or whether it signals confidence in easing. policy error-If the Fed begins to ease policy while inflation, especially service sector inflation, remains stubbornly above the central bank’s desired 2% target. decryption Previously reported.
“If you look at the federal funds futures today, the market is pricing in Wednesday’s rate cut, but we don’t see another rate cut until June,” said Mark Pilipchuk, chief marketing officer at Kraken’s CF Benchmarks. decryption.
“We think there is room for upside here if the Fed signals the possibility of further rate cuts before its June meeting. That becomes even more likely if the labor market continues to soften and inflation expectations remain in the 2% to 3% range.”
Thakral echoed a similar bullish outlook, suggesting that a “growth-supporting cutback” would strengthen the historical pattern of Bitcoin bottoming out on an ETF cost basis, effectively “increasing the likelihood of a rebound.”
But he cautioned that the rebound theory would lose momentum if the Fed’s forward guidance takes on a more hawkish tone.
