Bitcoin remains under pressure as ETF outflows and quantum computing concerns emerge
Bitcoin has experienced a complex and increasingly fragile period since mid-March, with price action reflecting a shift from institutionally driven recovery to a more uncertain, headline-sensitive environment.
Initial stabilisation gives way to weakness
What initially appeared to be a stabilisation phase following early-year weakness has evolved into a market grappling with slowing capital inflows, renewed outflows and emerging structural concerns.
At the core of recent price behaviour has been a clear change in institutional dynamics. Through late February and into mid-March, Bitcoin benefited from a strong wave of inflows into spot exchange-traded funds, with more than $2 billion entering these vehicles. That demand helped underpin a steady recovery, tightening supply and reinforcing the role of ETFs as a structural pillar of Bitcoin’s market.
However, that momentum has faded notably in recent weeks. ETF flows have slowed sharply and, in some cases, reversed altogether, contributing to a more hesitant price structure.
ETF flows turn negative
Recent data show that Bitcoin ETF demand has turned negative again, with analysts noting that sentiment around these products has weakened and is now acting as a headwind rather than a support.
This shift became particularly visible in the latest weekly developments. A broad-based wave of outflows across US-listed spot Bitcoin ETFs amid the ongoing war in the Middle East highlighted a coordinated reduction in institutional exposure.
Rather than isolated redemptions, withdrawals were seen across multiple major funds, signalling a more systemic repositioning. This cooling in demand has left Bitcoin more vulnerable to downside pressure, particularly as rallies approach resistance levels and fail to attract consistent follow-through buying.
Derivatives positioning amplifies moves
At the same time, derivatives positioning has continued to amplify these moves beyond spot market selling. Following the earlier recovery, long exposure had gradually rebuilt, but without strong underlying demand to support it, these positions became increasingly fragile.
As prices stalled and drifted lower, stop-losses were triggered and liquidations accelerated, reinforcing downward momentum. The absence of strong short-covering dynamics – previously a key driver of upside – has further reduced the market’s ability to sustain rallies.
Quantum computing concerns emerge
Beyond flows and positioning, a new narrative has emerged over the past few days that has added an additional layer of uncertainty: quantum computing risk. Google’s latest research has drawn attention across the crypto industry by suggesting that the computational power required to break the elliptic curve cryptography underpinning Bitcoin may be far lower than previously thought.
According to the findings, fewer than 500,000 physical qubits on a sufficiently advanced quantum computer could be enough to compromise the cryptographic systems securing Bitcoin wallets- a roughly 20-fold reduction from earlier estimates.
This has accelerated discussions around the so-called “Q-Day” scenario, when quantum systems could feasibly extract private keys from public ones, potentially exposing a meaningful portion of Bitcoin’s supply.
Timeline shortened for quantum threat
While such technology does not yet exist in practice, the timeline for its development appears to be shortening, with some projections pointing to the end of the decade. For markets, the significance lies less in immediate risk and more in forward-looking repricing.
Institutional investors, in particular, tend to discount long-term structural threats, and the re-emergence of quantum risk as a credible narrative has introduced a new variable into Bitcoin’s valuation framework.
The impact of this narrative is already visible at the margins. Recent reports suggest that alternative “quantum-resistant” tokens have attracted speculative interest following Google’s announcement, indicating that capital is beginning to consider longer-term security differentiation within the crypto space.
Long-term holders remain steady
Despite these headwinds, Bitcoin’s underlying structure has not deteriorated materially providing some foundation. Long-term holders remain largely intact, and there is little evidence of widespread distribution across spot markets.
Exchange balances have not surged significantly, suggesting that the recent weakness is being driven primarily by tactical flows, derivatives activity and sentiment shifts rather than a collapse in long-term conviction.
Nevertheless, the balance of forces has clearly shifted. Where earlier weeks were defined by strong inflows and constructive positioning, the current environment is characterised by caution, selective allocation and heightened sensitivity to both macro and technological narratives.
Without consistent institutional demand, Bitcoin has struggled to maintain upward momentum and has instead oscillated within a broad range but with recent downside momentum.
Technical analysis shows bearish bias
Bitcoin bearish case:
While no bullish reversal takes Bitcoin above its 25 March high at $71,879.57, downside pressure should remain in play with the area between the 8 and 29 March lows at $65,618.93-to-$64,960.67 likely to be revisited.
A fall through $64,960.67 may led to the 24-to-28 February lows at $63,046.65-to-$62,527.40 being revisited. Below this area lies the February low at $60,132.75.