Bitcoin faces ETF outflows and price pressure as a new lending protocol expands testnet activity

Bitcoin falls below $70k as ETF flows turn negative, while DeFi development continues with new Ethereum lending protocols.

Bitcoin has come under renewed pressure after slipping back below the $70,000 level, as U.S. spot ETF flows turned negative following several sessions of strong inflows. While earlier buying activity helped push the asset higher, analysts say the market remains in a fragile phase as institutional flows and broader demand signals continue to fluctuate.

Against this backdrop, development activity within decentralized finance continues. A new Ethereum-based lending protocol, Mutuum Finance, is expanding activity on its Sepolia testnet, where users are currently able to test lending, borrowing, and staking features ahead of the planned mainnet launch.

Bitcoin slips below $70k as ETF flows turn negative

Bitcoin fell back below the $70,000 level after U.S. spot Bitcoin ETF flows reversed following several days of strong inflows. The earlier rally had been supported by more than $1.1 billion in ETF inflows across three sessions, including $458.2 million on March 2, $225.2 million on March 3, and $461.9 million on March 4. However, the trend paused on March 5, when ETFs recorded $227.9 million in net outflows, according to SoSoValue data.

Despite the reversal, analysts noted that recent market strength was largely driven by spot demand rather than excessive leverage. Bitfinex reported that approximately $3.5 billion in spot purchases had occurred since March 1, with aggressive buying across exchanges helping Bitcoin reclaim key price levels. The Coinbase premium also turned positive after remaining negative for around 40 days, signaling renewed demand from U.S.-based investors.

Market sentiment, however, remains cautious. Binance Research stated that while institutional demand has improved and spot ETF flows recently turned positive on a weekly basis, overall sentiment remains fragile. Funding rates have fallen to their lowest levels since 2023, and analysts said long-term holder selling pressure appears to be gradually fading.

Bitcoin has largely traded within a $60,000 to $71,000 range in recent weeks. Analysts from Nansen said the market still needs a clear break above the top of that band to confirm stronger momentum. At the time of reporting, Bitcoin was trading around $69,925, down about 4.1% over 24 hours, with Ethereum and other major altcoins posting similar declines.

Mutuum Finance

New cryptocurrency MUTM, priced at $0.04 and with funds raised exceeding $20.7 million, has launched its V1 protocol on the Sepolia testnet. The number of token holders has surpassed 19,000, while protocol activity continues to expand, with over $200 million in TVL recorded in testnet liquidity.

What is Mutuum Finance?

Mutuum Finance is a lending and borrowing protocol built on the Ethereum network, giving users the ability to earn passive income through lending and borrowing crypto assets in a non-custodial environment.

For example, if a user decides to lend crypto assets such as USDT, the user can receive a percentage of gains based on the annual percentage yield (APY), which depends on pool utilization and borrowing demand. If the average APY is around 8% annually, a $5,000 USDT deposit could generate approximately $400 in passive income within one year.

Users who deposit assets in the Mutuum Finance protocol receive mtTokens in return, representing the deposited amount. For example, deposits of ETH generate mtETH, while USDT deposits generate mtUSDT. Since mtTokens follow the ERC-20 token standard, they can be transferred to compatible addresses and withdrawn at any time. These tokens represent the user’s deposit position while accumulating yield from lending activity.

mtTokens can also be staked, allowing users to receive dividends in MUTM tokens. A portion of fees generated from protocol activity is allocated to purchasing MUTM tokens from the open market, which can increase buy-side demand for the token.

Borrowing allows users to access liquidity without selling their existing holdings. For example, a user holding ETH that may increase in price can deposit it as collateral instead of selling it and borrow other crypto assets to cover expenses while maintaining exposure to ETH’s potential appreciation.

The lending and borrowing protocol has been audited by Halborn Security, a blockchain security firm. Following confirmation of the audit, the V1 protocol was launched on the Sepolia testnet, where users can test core features including mtTokens, debt tokens, stability factor monitoring, and the automated liquidator bot.

Staking functionality is also available in the current version of the protocol, allowing users to see how MUTM token rewards will be distributed in the future before the platform goes live on mainnet.

Bitcoin’s recent price fluctuations and shifting ETF flows continue to shape overall market sentiment, while development activity across decentralized finance projects moves forward. As Bitcoin tests key levels, platforms such as Mutuum Finance are progressing through testnet development and feature testing ahead of their planned mainnet launch, reflecting ongoing infrastructure growth within the crypto ecosystem.