Bitcoin Selloff Deepens as Institutional Flows Turn Negative
Bitcoin plunged sharply after liquidations topped $2.7 billion and institutional demand weakened, lifting selling pressure beyond leverage-driven moves. BTC fell almost 50% from October’s ~$126,000 peak, briefly touching about $60,000 over the weekend before rebounding to the low $70,000s. U.S. selling dominated: Coinbase showed a persistent spot premium deficit, and spot BTC ETFs recorded roughly $6.2 billion in cumulative net outflows since November. Heavy ETF trading (IBIT traded >$10 billion notional in a single day) and redemptions amplified downward momentum, creating a loop of forced spot sales. Options flow concentrated around IBIT and Deribit, funding rates turned sharply negative, and volatility spiked as crowded positions were cleared. Macro factors — including investor concern after Kevin Warsh’s Fed nomination and a rotation into AI stocks — reduced risk appetite and liquidity for crypto. Wintermute’s analysis describes recent activity as structural pressure and a leverage reset, with roughly $25 billion in unrealized losses across institutional treasuries weighing on new demand. Spot trading remains light, limiting recovery potential; without renewed spot demand, price action is likely to remain choppy.
Bearish
The article describes a pronounced downward move driven by large liquidations, sustained ETF outflows and dominant U.S. selling — all signs of弱 demand and forced supply. Key indicators: $2.7B+ in liquidations, ~$6.2B cumulative ETF net outflows since November, concentrated options activity (IBIT/Deribit) that pushed funding rates negative, and roughly $25B in unrealized institutional losses. These factors create a self-reinforcing loop: falling prices trigger ETF redemptions and spot sales, which further depress price until fresh spot demand returns. Macro headwinds (Fed-related tightening concerns and rotation into AI equities) reduce the likelihood of immediate capital reallocation back into crypto. Historically, similar episodes—such as leverage-driven crashes and ETF outflow periods—lead to extended choppy or downward markets until leverage is fully flushed and new spot buyers emerge. Short-term implication: elevated volatility, risk of further downside and limited recovery rallies. Traders should expect choppy price action, potential opportunistic bounces (short squeezes) but no reliable uptrend until spot flows and ETF metrics stabilize. Long-term implication: if institutional treasuries remain underwater and macro liquidity preferences shift away from risk assets, Bitcoin could stay range-bound or trend lower until macro sentiment and ETF flows turn positive.