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Global investment management firm VanEck has noted that key data threatens Bitcoin's bull market.
The recent massive correction has coincided with "historically low" funding rates and a brutal ETF outflow streak, which appears to be the longest one since its launch.
The dramatic decline in the funding rate has been described as "one of the most striking" market sentiment indicators. It indicates that the speculative frenzy that emerged in the fourth quarter of the year has now cooled.
Such extremely low speculative positioning had been unseen following the launch of Bitcoin ETFs in early 2024.
The top coin has recorded a 30% drop, which is the second-largest correction of the cycle so far. Such significant corrections are typical for bull market cycles, but this one is remarkable due to the fact that a slew of positive regulatory developments have failed to revive bullish momentum.
Bitcoin ETFs have hemorrhaged more than $6 billion within five weeks, with institutional investors seemingly losing confidence in the leading cryptocurrency amid broader trade tensions that are negative impacting the crypto market.
Resetting expectations
Even though the key data indicates bearish sentiment, the market has not reached capitulation levels just yet.
After becoming aggressively bullish in Q4, market participants are now in the process of "resetting expectations," according to VanEck.
For now, Bitcoin seems to lack an obvious bullish catalyst that could rekindle speculative fervor.