Bitcoin Rebounds Despite ETF Outflows, Analysts Say It May Be a Relief Rally

Bitcoin (BTC) and Ethereum (ETH) recovered part of their recent losses on Thursday, even as investors continued to pull funds from cryptocurrency ETFs amid growing geopolitical uncertainty.

The rebound comes after Bitcoin fell to $70,000 earlier in the week from a high of $74,500, while Ethereum dropped to $2,085. Other major cryptocurrencies, including XRP, Dogecoin, Hyperliquid, and Zcash, recorded declines of more than 2.5% in the same period.

ETF Outflows and Market Volatility

Data from SoSoValue shows that American investors sold significant amounts from both Bitcoin and Ethereum ETFs on Thursday. Bitcoin ETFs saw outflows exceeding $227 million, reversing gains of $461 million from the previous day.

Ethereum ETFs recorded $90 million in withdrawals after $169 million of inflows the day before. Other crypto ETFs, including XRP, Solana, and Hedera, also experienced outflows.

The sell-off coincided with declines in the broader U.S. stock market. The Dow Jones Industrial Average dropped over 785 points, while the S&P 500 and Nasdaq 100 fell by more than 50 points each.

Analysts link part of the volatility to ongoing concerns over the war in Iran, following reports of continued military engagement and uncertainty over ceasefire negotiations. The situation has kept crude oil and natural gas prices elevated, which could influence Federal Reserve policy on interest rates.

Technical Signals for Bitcoin and Ethereum

Despite the pullback, some technical indicators suggest Bitcoin’s recent gains may not signal the start of a sustained bullish cycle. According to CryptoQuant, Bitcoin’s rebound above $73,000 is likely a short-term “relief rally” within an ongoing bear market.

The firm noted that while selling pressure has eased, the Bitcoin Bull Score Index remains at 10 out of 100, indicating resistance levels near $79,000 and $90,000 could cap further upward movement.

Ethereum has shown sideways movement between $1,812 and $2,185 and formed a bearish flag pattern on daily charts. Analysts caution that a breakdown toward the year-to-date low of $1,736 remains possible in the near term.

Diverging Views on Long-Term Potential

Long-term perspectives on Bitcoin remain mixed. Macroeconomist Lyn Alden projects that Bitcoin could deliver stronger returns than gold over the next two to three years, citing market sentiment and undervaluation.

In contrast, investors like Ray Dalio continue to favor gold for wealth preservation due to its long-standing role as a reserve asset. Despite differing views, Bitcoin’s correlation with gold has increased, highlighting its role as a hedge against broader economic uncertainty.

Bitcoin’s rebound appears to be a temporary recovery amid ETF outflows and macroeconomic uncertainty, rather than the start of a new bullish cycle.