As the second quarter commences, the Bitcoin ETF market faces negative sentiment with GBTC outflows surging past $300 million once again.

On April 1, aggregate flows into all nine spot Bitcoin ETFs turned negative, with a total net outflow of $85.84 million. Notably, the Grayscale Bitcoin ETF GBTC led the way with a single-day net outflow of $302 million. In contrast, BlackRock's IBIT ETF saw a net inflow of $165 million, and Fidelity's FBTC ETF witnessed a net inflow of $43.99 million. The cumulative net inflow for Bitcoin spot ETFs reached $12.04 billion, indicating ongoing investor interest in the asset class, as per data from Farside Investors.

While Bitcoin ETF flows turn negative, the Bitcoin price has dropped 5.5% to $66,000, triggering a sharp correction across the broader cryptocurrency market. This decline comes just before the upcoming Bitcoin halving event, which is only 19 days away. The correction may dampen the expectations of analysts who anticipated BTC hitting $75,000 by the halving event.

As April unfolds, the crypto market's retreat suggests a weakening of the recent bullish rally, notably observed during Bitcoin's surge to an all-time high. This shift in sentiment reflects cautiousness prevailing in global markets due to ongoing inflationary pressures in the US. Consequently, investors are adjusting their expectations for potential Fed interest rate cuts and looser monetary policies.

Stefan von Haenisch of OSL SG Pte in Singapore highlighted the impact of anticipated reduced Fed interest rate cuts on the cryptocurrency sphere. This sentiment has led to a broad sell-off across various sectors in the crypto market, affecting those that have notably outperformed Bitcoin in the last six months, including meme coins, amid this cautious atmosphere.