Bitcoin and Ethereum ETFs See Record $797M in Outflows as Crypto Market Turns Risk-Off

Spot Bitcoin ($BTC) and Ethereum ($ETH) exchange-traded funds (ETFs) in the United States witnessed a major wave of redemptions on Tuesday, with combined net outflows hitting $797 million. 

The sell-off came amid a broader downturn in digital assets, as institutional investors shifted positions in response to tightening macroeconomic conditions and renewed strength in the U.S. dollar.

According to data from Farside Investors, spot Bitcoin ETFs alone recorded $577.74 million in outflows, marking the largest single-day withdrawal since August 1. Fidelity’s FBTC led the declines with $356.6 million exiting the fund, followed by ARK & 21Shares’ ARKB, which saw $128 million in withdrawals. 

Grayscale’s GBTC also posted $48.9 million in redemptions. In total, seven Bitcoin funds posted negative flows, extending a five-day losing streak that has now totaled $1.9 billion in outflows.

Ethereum ETFs followed a similar trajectory, logging $219.37 million in net outflows. BlackRock’s ETHA saw the heaviest hit with $111 million withdrawn, while Grayscale and Fidelity’s Ether funds also recorded redemptions. By contrast, Solana ETFs managed small inflows of $14.83 million, their weakest day since launch, but still the only bright spot in an otherwise negative session.

Crypto analyst Rachael Lucas from BTC Markets described the trend as a “decisive shift in institutional positioning,” suggesting that the selling reflected more than just short-term volatility. “It’s a strategic recalibration amid tightening macro conditions,” she said, referencing a growing caution among large investors.

The renewed market uncertainty followed comments from Federal Reserve Chair Jerome Powell, whose hawkish tone dashed hopes for a December rate cut. The U.S. dollar index (DXY) climbed above 100, prompting risk aversion across equities, bonds, and digital assets alike. “Markets were pricing in an easing cycle,” Lucas added, “but Powell’s message reset those expectations in a single stroke.”

Market Fear Deepens as Bitcoin Tests $100,000 Support

The wave of ETF outflows coincided with a sharp decline in the broader crypto market. Bitcoin dropped more than 8% in the past 48 hours, briefly dipping below $100,000 for the first time since June. 

The world’s largest cryptocurrency fell to an intraday low of $98,966 before recovering slightly to trade near $101,685 at press time, down 2.72% in 24 hours. Ethereum also tumbled 5.73%, trading around $3,302.

On-chain data indicated widespread panic selling, with the total transaction volume in losses hitting a nine-month high. More than 235,850 BTC, worth approximately $24 billion, were moved at a loss within a single day, a signal of mounting investor fear and capitulation.

“The crypto fear and greed index dropped sharply to 21, signaling extreme fear,” said Derek Lim, research lead at Caladan. Lim noted that Powell’s remarks, combined with uncertainty over a potential U.S. government shutdown, had intensified investor caution. Still, Lim expressed long-term optimism. “We’re still moving toward the end of quantitative tightening,” he said, adding that eventual rate cuts could help restore momentum once macro pressures ease.

From a technical standpoint, Bitcoin’s MVRV Ratio, a key profitability indicator, has fallen into the so-called “opportunity zone” for the first time since March, currently hovering between 6% and 17%. Analysts interpret this as a potential market bottom signal, suggesting that selling activity may be near exhaustion. However, whether that translates to a rebound depends heavily on short-term investor behavior.

Bitcoin is now sitting just above the critical $100,000 psychological support. A sustained break below that level could open the door to deeper losses. The recent 8% correction also validated a head-and-shoulders pattern, pointing to a potential 13.6% decline that could drag BTC down to $89,948. On the other hand, if buyers step in at lower levels, Bitcoin could rebound to $105,000 or higher.

Conversely, sustained selling pressure could push BTC below $98,000, with downside targets near $95,000. As market confidence falters, analysts say the next few trading sessions will be critical in determining whether Bitcoin stabilizes or continues its downward trajectory.

Analysts Warn of “Bear Market” Signs as Stablecoin Dominance Rises

As Bitcoin slipped to a four-month low of $98,900, some analysts warned that the crypto market may be entering a new bearish phase. Private wealth manager Swissblock noted that its proprietary Bitcoin risk-off indicator had destabilized amid the sell-off, suggesting the asset may be “transitioning into a bear market.”

The firm said the signal remained within a low-risk regime for now, but added that “if it transitions into a high-risk, it would signal a potential trend shift.” Swissblock cautioned that a sustained move into high-risk territory could mark “a structural change rather than a short-term correction.”

On-chain analytics firm Glassnode provided further evidence of waning optimism. The company reported that monthly funding paid by long traders in Bitcoin perpetual futures had plunged 62% since mid-August, from $338 million per month to just $127 million as of this week. “This underscores a clear macro downtrend in speculative appetite,” Glassnode said, “as traders grow reluctant to pay interest to maintain long exposure.”

Market sentiment has deteriorated significantly since Bitcoin’s all-time high above $126,000 in October. The BTC/USD pair is now down roughly 20%, and analysts say the drop below the short-term holders’ cost basis of around $113,000 could indicate a medium-term bearish phase. 

Glassnode added that Bitcoin has “lost the support at the 85th percentile cost basis” around $109,000, with the next critical level sitting near the 75th percentile cost basis of about $99,000, a threshold that has historically provided support during major pullbacks.

“$BTC Now broke below its 10th of October low,” trader Daan Crypto Trades said in a Tuesday post on X, referring to the October 10 market crash that sent prices to $103,500. “This is the last major level before the $98K low from the Middle Eastern war fud back in June.”

Liquidation data from trading platforms shows a heavy concentration of leveraged positions around the $98,000 level, suggesting that a break below it could trigger a cascade of forced liquidations, potentially accelerating the sell-off toward $95,000. Conversely, resistance has begun forming around $102,500, with additional sell orders between $103,000 and $105,000.

“Bear market confirmed,” said analyst Mikybull Crypto in a post highlighting the breakout of USD Tether ($USDT) market dominance from an inverse head-and-shoulders pattern. “Similar formation in previous cycles led to a bear market,” he added, noting that rising stablecoin dominance typically signals risk aversion and a shift away from volatile assets like Bitcoin.

The latest sell-off also wiped out over $1.8 billion in leveraged positions, marking Bitcoin’s steepest drawdown since the June 2025 correction. CryptoQuant’s head of research Julio Moreno warned that if Bitcoin fails to stabilize above $100,000, it could slide to as low as $72,000 within the next one to two months. 

“Spot demand has contracted, ETF inflows turned negative, and our Bull Score Index remains deep in bearish territory,” Moreno said. He added that the market remains under pressure from fading rate-cut hopes and broader macroeconomic uncertainty.

Gerry O’Shea, head of market insights at Hashdex, echoed this sentiment, noting that fears of tighter monetary policy and profit-taking by long-term holders have weighed heavily on prices. “While $100,000 is a key psychological level, it doesn’t change Bitcoin’s long-term potential,” O’Shea said, suggesting that short-term turbulence may not derail the broader adoption trend.

Still, traders remain cautious. Captain Faibik, a well-known market analyst, said he’s “no longer bullish” for the next six to eight months after spotting a rising wedge pattern on Bitcoin’s weekly chart, a technical formation that often precedes deeper corrections. “When I first shared this setup, many ignored it, but now it’s playing out as expected,” Faibik said, adding that a further slide toward $72,000, or even $55,000,  could be possible if major support levels fail.

At the time of writing, Bitcoin was trading around $101,730, showing a slight rebound from its earlier lows but still under heavy selling pressure. Whether the current correction turns into a full-fledged bear market remains to be seen, but the exodus from ETFs and the surge in stablecoin demand reflect a market firmly in defensive mode.