Cryptocurrencies are trying to reduce the severe losses they suffered last evening. After Bitcoin reached around $39,370, it was able to consolidate a little and is still approaching the $40,000 level.

Yesterday’s decline in cryptocurrencies came as massive outflows from spot Bitcoin ETFs, led by Grayscale Bitcoin Trust (GBTC), continued to be recorded, in conjunction with the absence of sufficiently encouraging news for the market.

This decline also led to the third largest wave of liquidation of long positions in cryptocurrencies this year, with more than $218 million from the positions that were liquidated yesterday, according to data provided by CoinGlass. While Bitcoin, as usual, had the largest share of these liquidations, with approximately $62 million.

GBTC recorded outflows worth $640 million yesterday alone. The reason for this huge amount is that the bankrupt crypto exchange, FTX, continues to liquidate its assets. This ETF, in turn, is also still suffering from the exodus of investors from it, either taking profits after previously buying at a large discount from the net asset value before converting it to an ETF, or moving to other alternatives that are substantially less expensive.

This massive outflow of ETFs came after a week that saw net inflows of about $1.25 billion into all US spot Bitcoin ETFs, in addition to about $11.8 billion in trading volume, according to data provided by CoinShares. But in the end, all crypto investment products globally recorded outflows of about $21 million last week.

While the new ETFs recorded inflows of approximately $4.13 billion compared to $2.9 in outflows since their launch.

The vision is quite blurry in the crypto market. On the one hand, for example, the famous trader and critic of cryptocurrencies, Peter Schiff, noted that Bitcoin ETFs had entered bear market territory after losing more than 20% from their highs. Schiff also pointed out earlier that Bitcoin bulls have nothing to count on after the launch of these ETFs.

On the other hand, the outflows from Bitcoin spot ETFs may have come for reasons (mentioned above) that are exceptional and temporary. While excluding outflows from GBTC gives a somewhat positive picture, as the impact of those flows fades and the investor base in these funds expands, positive sentiment may gradually return to the market.

In any case, we are keeping an eye on the performance of Bitcoin ETFs over the coming weeks and months to try to gauge investor sentiment and whether they are taking Bitcoin and its ETFs as a means of short-term speculation only or for long-term investment.