Bitcoin has experienced significant net outflows from U.S.-based spot exchange-traded funds (ETFs), totaling approximately $1.72 billion over a recent five-day period. This trend indicates a broad risk-off attitude permeating the cryptocurrency market as selling pressure from investors has lessened. Despite the substantial withdrawals, on-chain metrics suggest that the downside momentum for Bitcoin is waning.
On a single day, the ETFs recorded net outflows of $103.5 million, marking the fifth consecutive trading day of withdrawals. This selling trend coincided with Bitcoin trading below the critical psychological threshold of $100,000 for more than two months, with the cryptocurrency priced near $89,160 at the time of reporting. The last instance of Bitcoin trading above $100,000 was on November 13.
Market participants closely monitor ETF flows as they serve as a gauge of retail engagement and short-term sentiment. Ongoing outflows typically reflect diminishing confidence among spot buyers. However, contrasting on-chain data reveals a more complex narrative; metrics indicate that selling pressure has diminished since late November, suggesting that bearish sentiment is not as strong as it appears.
The Growth Rate Difference data, a key indicator, fell to roughly -0.0013 in late November but has recently improved to about -0.0009, indicating a reduction in selling intensity. Analysts caution that, while this shift does not confirm a bullish reversal, it does suggest that bears are losing their grip on the market as marginal selling slows. This dynamic helps explain why Bitcoin has shown some stabilization near critical price levels despite ongoing ETF withdrawals.
From a technical analysis perspective, defined price zones are influencing Bitcoin“s near-term behavior. The cryptocurrency cleared a weekly imbalance between $96,000 and $98,000 before a pronounced sell-off occurred, subsequently pushing prices toward the monthly open, where buying activity emerged, resulting in a modest bounce. This action has created an upside imbalance between $93,600 and $94,500, which traders anticipate revisiting. Short-term traders have identified $91,400 as a liquidity zone that could attract attention in the upcoming sessions.
Conversely, traders are also monitoring weekly lows situated between $86,700 and $86,300. A failure to maintain this range could subject Bitcoin to deeper tests around $84,400 and $83,400. Market expectations suggest a consolidation range between $91,400 and $86,300 before a potential directional break, with analysts framing this structure as corrective rather than indicative of a trend reversal.
Sentiment across the crypto markets remains cautious, as evidenced by the Crypto Fear and Greed Index, which recently recorded an “Extreme Fear” level of 25. This index has remained in a state of fear since midweek, reflecting ongoing anxiety among market participants. The broader crypto sentiment has declined in tandem with Bitcoin“s current consolidation. Analytics firm Santiment has noted that retail traders are increasingly reducing their exposure, with a shift of interest towards more traditional assets.
Amidst the prevailing uncertainty, Santiment has pointed out that reduced supply distribution could be early signs of a potential bottom forming. They advise patience over aggressive positioning in the current market landscape. Additionally, macroeconomic factors are also influencing sentiment; Nik Bhatia, founder of The Bitcoin Layer, has linked the current subdued mood in Bitcoin to the strong performance of precious metals, highlighting a stark comparison to post-FTX levels.
As market participants grapple with these dynamics, the combination of ETF outflows, easing selling pressure, and pervasive fear shapes Bitcoin“s immediate outlook. Key levels to watch will be whether the price can maintain above $86,300 and reclaim liquidity zones around $93,000 in the weeks to come.
