A 'RISK-OFF' macro climate caused by rising 10-year Treasury yields and other factors reduced investor interest in riskier assets like Bitcoin, said Axel Adler.

  • Bitcoin's internal market structure has weakened, with increased coin inflows to exchanges and reduced demand for U.S. spot ETFs, leading to a "WAIT" signal, according to a Cryptoquant analyst.
  • Despite its weekly price increase, retail sentiment shifted to 'bearish' zone on Stocktwits and exchange net flow reversed to an inflow of 12,700 BTC.
  • Institutional ETF inflows decreased significantly, showing insufficient demand to absorb the increased supply from exchanges.

Bitcoin’s (BTC) internal market structure weakened over the past week as coins flowed back to exchanges and demand for U.S. spot ETFs eased, with one systematic model flagging rising seller pressure.

CryptoQuant analyst Axel Adler Jr.’s Weekly Engine model has issued a “WAIT” call on Sunday, unchanged for an eighth straight week, with 0% allocation in Bitcoin. Bitcoin’s price closed -0.1% on the week, according to the analyst’s model. 

As of writing, the apex currency was trading around $65,130, up over 1% in the last 24 hours. On Stocktwits, retail sentiment around BTC dropped to ‘bearish’ from the ‘neutral’ zone, accompanied by ‘low’ chatter levels over the past day.

The seven-day exchange netflow flipped from an outflow of 11,200 BTC to an inflow of 12,700 BTC, a reversal of 23,900 BTC, or $1.54B at the week’s close. The inflow was the main negative change in the model’s sell-pressure layer, Adler said, meaning it adds to the supply of immediate sale.

Why The 10-Year Treasury Yield Matters

The analyst, however, pointed to the ‘biggest liquidity indicator’ – the 10-year Treasury yield. The 10-year yield has risen by 14 basis points. This yield is effectively the risk-free return available to any investor willing to lend to the U.S. government for a decade, so when it rises, assets that pay nothing and carry volatility, especially for assets like Bitcoin, are affected. It also pushes up borrowing costs throughout the economy, making financial conditions more restrictive and reducing the money available to investors to chase risk. 

ETF Demand Thins Out

Institutional flow was positive but shrank. Seven-day net flow into ETFs fell to 373 BTC, or around $24 million, from 943 BTC, or roughly $61 million, a week earlier, insufficient, in Adler’s framing, to absorb the exchange inflow. 

Further, taker aggression dropped to -0.75 from 0.43, the spot-led move indicator switched to NO from YES, and the Buy/Sell Index SMA7 fell to 19.7 from 22.6. Open interest momentum, however, climbed to 0.276 from 0.163, but the model doesn’t see leverage as ‘overheated,’ said Adler.

Not Liquidity In Market For An Uptrend

The market is lacking buying liquidity, said Adler. New capital activity was still near annual lows, he added, and stablecoins continued to leave exchanges. Without such an increase in liquidity, the market will find it hard to convert a local recovery into a sustained uptrend, he said. “Participants are still using the price recovery to exit positions, keeping pressure on the market,” said Adler, pointing to the fact that realized losses far exceed profits. 

The Macro Concept At Play

Adler noted that the macro backdrop shifted from “BALANCED” to “RISK-OFF” over the week with his composite Wind Score falling to -2.89 from -0.44. The S&P 500 (SPX) fell 1.7%, the VIX (VIX) rose to 18.7 from 16.7, and high-yield credit spreads widened to 2.77 from 2.71, three signs investors were not taking riskier bets.

Bitcoin’s Strength During Active War

On Sunday, Michaël van de Poppe claimed that Iran held off on strikes, and the US hadn’t attacked for days. He added BTC hadn't broken through important resistance yet but will probably do so as the price of oil pulled down. Holding $65,000 during an active war was a sign of underlying strength for the asset.

Read also: Coinbase CEO Brian Armstrong Says Pivot From Crypto To AI Is 'Zero Sum, Scarcity Thinking

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