ETF Withdrawals Weigh on Bitcoin

The hemorrhage hasn’t stopped bleeding in the crypto universe. It marks an era where every pause seems to announce a new bleeding. The rebounds are there, yes, but they hardly last more than the flap of a nervous market’s wings. And for a few days now, another ailment gnaws at the beast: ETF withdrawals. These investment vehicles, once seen as the golden bridge to institutional adoption, have become the valves of massive disengagement. Bitcoin staggers, crypto investors lose hope, and liquidations make a comeback through the front door.

Crypto ETFs: From Adoption Dream to Stress Machine

Long awaited as the Grail, spot Bitcoin ETFs today reveal themselves as a ruthless mirror of institutional sentiment. Since mid-January, cumulative outflows have exceeded $2.9 billion. This phenomenon coincides with a brutal 26% correction in BTC price. The rejection at $98,000, then the slide toward $70,000, ended the beautiful illusion of a solid upward trend.

Asset managers no longer want to wait. After a technical rebound where $561 million briefly flowed into ETFs, the trend reversal was immediate. Fidelity, Ark, Grayscale: all suffered withdrawals amounting to several hundred million within just a few hours.

And the bleeding continues. Even BlackRock, perceived as the “rock” of Wall Street crypto, could not stop the momentum. As James Seyffart (@JSeyff) highlights:

Bitcoin ETF holders are recording their biggest losses since the launch of these funds in January 2024, due to the collapse of bitcoin’s price.

These figures sound like a signal of lasting disconnection. ETFs are no longer trust relays but direct witnesses of a market that withdraws—methodically.

Behind the Liquidations: Excessive Leverage and Lack of Safety Net

The October 10, 2025 event is still fresh in everyone’s memory. A black day, when $19 billion went up in smoke, due to an infernal sequence: rumors, technical bugs, macroeconomic panic. Some tried to reduce the cause to a simple “depeg” of USDe on Binance.

A too comfortable explanation for Haseeb Qureshi, partner at Dragonfly, who dismantles this simplistic version in a viral thread:

The price of USDe only diverged on Binance, it did not diverge on other platforms. Yet, the liquidation spiral affected the entire market. So, if USDe’s “depeg” did not spread to the entire market, it cannot explain why each platform experienced massive wipeouts.

The problem lies elsewhere: in poorly calibrated leverage, and a liquidation architecture that prefers to avoid losses rather than ensure stability. Market makers, deprived of real-time data due to API outages, couldn’t rebalance their books. Result: automatic liquidations chained losses one after another.

Without TradFi-type protection (circuit breakers), the crypto market found itself without a parachute.

Bitcoin and Technical Levels: Is the Compass Broken?

Bitcoin is looking for a base, a solid foundation. And technical analysts all watch the same number: $68,400. This is the level of the 200-week moving average, a sacred reference for long-cycle traders. But here too, signals are blurred. Since November, BTC has lost its 50w and 100w MAs, two key thresholds. And the specter of a drop to $58,200 resurfaces.

ETFs increase the pressure. Seeing prices drift toward these fragile zones, desks switch to “sell the rip” mode. They liquidate on rebounds rather than buy on pullbacks. Even options confirm this distrust: delta skew rose to 13%, reflecting strong demand for puts and distrust of any immediate rebound.

The mechanism is ruthless: when ETFs become fast-exit tools, they worsen each fall. Entry points become capitulation zones.

Key Landmarks to Understand the Current Spiral

• $70,539: Bitcoin price at the time of writing;
• $2.9 billion: cumulative withdrawals of spot BTC ETFs over 12 days;
• $3.25 billion: recent futures Bitcoin position liquidations;
• 13%: BTC options skew, indicating strong pessimism;
• $68,400: 200-week EMA level, last technical bastion.

Most cryptocurrencies are currently in the red, and the charts look like a stormy sea. Yet, another crypto asset class is experiencing record growth: stablecoins. These digital tokens, backed by fiat currencies, have just reached a historic trading volume of $10 trillion. As often in storms, the most stable shelters attract the crowds.