Bitcoin Enters ‘High-Risk Zone’ as ETF Outflows Hint at Institutional Retreat: Swissblock

This steady stream of ETF outflows continues to add pressure on the supply side without any visible demand offset, according to Glassnode.

Bitcoin is moving into a high-risk environment due to ongoing institutional selling, mainly from US spot exchange-traded funds, according to crypto analytics platform Swissblock.

Swissblock said on Tuesday that its Bitcoin risk index had reached a high-risk score of 33 out of 100, adding that “every time the Risk Index signals that selling pressure is structurally overwhelming the market, what sits underneath is institutional distribution.”

The platform’s proprietary risk index was designed to measure the overall risk level in the Bitcoin market by tracking the relative balance between selling pressure and buying pressure, helping assess how “risky” it currently is to buy or hold Bitcoin.

After strong accumulation in March and April, May has shifted back into distribution, and the risk index is now “moving into high-risk territory while ETF flows are deteriorating simultaneously,” according to Swissblock.

It added that spot Bitcoin ETF demand is no longer absorbing selling pressure effectively, and without strong ETF support underneath, “the risk index can continue accelerating higher.”

On-chain analytics provider Glassnode reported on Monday that US Bitcoin ETFs have posted net outflows on nearly every trading day since May 7, signaling “a persistent institutional sell signal now running for more than two weeks.”

“This steady drip of outflow continues to add to the supply side without a visible demand offset,” it said.

“Spot ETF flows have posted more than $2 billion in outflows over the past two weeks, highlighting that institutional risk appetite is still sensitive at the margin,” he added.

Bitcoin Slips as US Strikes on Iran Shake Global Markets

Risk accelerated even further on Tuesday morning after multiple reports indicated that the US had launched fresh strikes on Iran despite the two countries recently making progress toward a peace deal.

United States Central Command said the strikes targeting Iranian missile sites and boats attempting to place mines were carried out in “self-defense” to protect US troops from threats posed by Iranian forces.

Bitcoin reacted with a 1% decline, dropping from above $77,000 to just under $76,500 on Coinbase, according to TradingView, though it has remained range-bound for nearly four months.

Ko said that “despite Washington’s latest ‘self-defence’ operation, the very short-term market reaction may still lean risk-on, particularly as investors appear to be looking through the geopolitical noise and focusing on the possibility of a US-Iran peace deal.”