Bitcoin Enters High-Risk Zone as Institutional Selling Pressure Builds

Bitcoin has entered a high-risk zone as institutional selling tied to US spot exchange-traded funds intensifies, on-chain analytics platform Swissblock said.

Swissblock said on May 26 that continued net outflows from US spot Bitcoin ETFs are increasing selling pressure from institutional investors.

Its proprietary Bitcoin risk index has climbed to 33 out of 100. When the index rises, structural selling pressure has historically outweighed buying demand, the firm said.

The indicator is an on-chain metric that measures current market risk based on the balance between buying and selling pressure in the Bitcoin market.

Swissblock said the market saw strong accumulation in March and April before shifting back into a distribution phase in May. It added that the risk index has been rising alongside worsening fund flows for US spot Bitcoin ETFs.

Glassnode also said US spot Bitcoin ETFs have recorded net outflows on most trading days since May 7. It described the pattern as a sign of institutional selling that has persisted for more than two weeks.

Jeff Ko, a senior analyst at CoinEx, said the spot ETF market has posted more than $2 billion of net outflows over the past two weeks. Institutional investors' risk appetite remains subdued, he added.

Geopolitical tensions between the US and Iran are also weighing on the market. US Central Command said it recently carried out airstrikes on Iranian missile facilities and a vessel used to lay naval mines.

After the news, Bitcoin fell from around $77,000 to below $76,500 on Coinbase. Still, the market is also weighing the possibility of ceasefire talks between the US and Iran, leaving room for limited volatility in the near term.