Equity weakness could damp demand for bitcoin after biggest ETF inflows in a month

Bitcoin BTC$81,462.69 dropped about 1.1% over the last 24 hours, ether ETH$2,387.32 fell 1.7% and the broader CoinDesk 20 (CD20) Index lost roughly 1.6%, pulled lower by declines in Asian stocks and the rising price of oil.

Further weakness in equities could damp demand, analysts at QCP Capital wrote in a note published Monday. That may be on the cards. Both Nasdaq 100 futures and S&P 500 futures are lower, with companies including Coinbase Global COIN and Galaxy Digital GLXY falling in pre-market trading.

“Broader equity deleveraging dynamics could transmit to cryptocurrency markets and potentially threaten the $80,000 support level if sustained,” the analsysts wrote.

For the time being, the bitcoin price remains above that level after demand for the largest cryptocurrency picked up on Monday, as illustrated by the spot U.S. bitcoin ETFs. The funds posted their biggest net inflows in a month and BlackRock’s IBIT recorded its largest inflows in over a year.

Monday’s fund flows offer encouragement for bulls, though demand remains concentrated. The ETFs attracted roughly $527 million in net flows, with BlackRock’s taking in $665 million while those from Fidelity and Grayscale recorded withdrawals.