Will Bitcoin’s largest ETF withdrawal since July deepen BTC’s crash?

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Key Takeaways

What triggered Bitcoin’s drop below $100K?

Oh dear! A staggering $492 million in liquidations and a hefty $577 million in ETF outflows have sent Bitcoin’s price tumbling as institutions took their well-timed profits. A disastrous but somewhat predictable dip, wouldn’t you agree?

What could help BTC recover next?

There’s hope, dear reader! Strong retail accumulation on Coinbase and bullish Puell Multiple readings point to renewed upside potential near long-term support. So, don’t write off Bitcoin just yet, even though it’s hanging on by a thread.

Bitcoin [BTC] faced quite the dramatic selloff, with the price slipping below $100,000 for the first time since June 23rd. Truly a shocking sight, wasn’t it?

The drop triggered around $492 million in liquidations over 24 hours, as per those ever-so-precise Derivatives trackers. Yet, despite this, early demand returned as eager buyers pounced on discounted bids. A bit of an emotional rollercoaster, if you ask me.

U.S. retail and broader market regain confidence

Retail investors in the U.S. are cautiously returning to the market after the previous day’s decline, with buying activity ticking up across major exchanges. It seems they’ve had enough of the drama-back to the Bitcoin party, everyone!

The Coinbase Premium Index-a fancy tool that tracks the price difference between Coinbase and offshore exchanges-surged to -0.9, inching toward the neutral-to-bullish zone (positive territory). Hooray for small victories!

While retail sentiment hasn’t fully switched to “bullish” just yet, the data suggests growing conviction as traders accumulate Bitcoin at what they believe to be “discount” prices. Well, let’s hope they’re right.

The broader market, ever the follower, mirrored this shift. According to the Puell Multiple, an on-chain valuation indicator, the metric climbed to around 0.9 as of this moment. Historically, readings at this level imply ongoing accumulation, and, if history holds true, potential for further upside until the indicator reaches around 6-typically a sign of overvaluation. A little too rich for my taste, but that’s just me.

Historical levels reached

The recent decline in the market has pushed Bitcoin into the 365-day Moving Average (MA) cross-a historically significant zone for spotting major price reversals. Oh, how we’ve seen this movie before.

This indicator has reliably marked pivotal turning points for Bitcoin. For example, in April, after a broad selloff spurred by former U.S. President Donald Trump’s tariff hike, Bitcoin entered this zone and soon rallied. How nostalgic!

Again, in August 2024, after trading near this level, Bitcoin rebounded. It appears that Bitcoin has once more visited this familiar zone, offering hope for another rally. Or perhaps it’s just having a déjà vu moment.

This zone also aligns with the lower Bollinger Band-an area that has frequently acted as a springboard for price rebounds. If the buying momentum picks up, Bitcoin could aim for the upper Bollinger Band, a nice $115,682. Not too shabby, if it can pull it off.

Institutional outflows pose a hurdle

Ah, but not so fast! Institutional investors remain a thorn in Bitcoin’s side. Data from U.S. Spot Bitcoin ETFs shows that institutional holders have continued to offload their positions since the beginning of the week, putting more downward pressure on prices. It’s almost as if they’re trying to rain on Bitcoin’s parade.

According to SosoValue, these outflows amounted to approximately $577 million, marking the largest single-day withdrawal since July 1st. A rather painful blow, don’t you think?

With a combined net asset value of about $134.5 billion, continued selling by institutional investors could put a significant damper on Bitcoin’s recovery potential, limiting the chance of any immediate upside momentum. How terribly inconvenient!

Maria Carola, CEO of StealthEX, weighed in, offering a rather somber note: despite signs of bullish momentum returning to the market, the downside risks are far from over. Well, isn’t that just the most delightful thought?

“If the U.S. government shutdown continues and the Federal Reserve fails to deliver a clear stance on interest rates, the likelihood of Bitcoin retesting the $100,000 level remains high.”

She added that government uncertainty and weakening institutional demand could continue to plague the market, extending volatility. In other words, don’t hold your breath for a smooth ride.

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2025-11-06 05:23