Bitcoin has experienced significant selling pressure recently, with U.S.-based spot Bitcoin exchange-traded funds (ETFs) facing five consecutive days of net outflows. Investors withdrew approximately $1.72 billion from these products during this period, reflecting a broader risk-off sentiment across the cryptocurrency markets.
Despite the substantial outflows from ETFs, on-chain metrics indicate that the downside momentum for Bitcoin is weakening. Market data suggests that while Bitcoin continues to trade in negative territory, the intense selling pressure observed in late November has eased.
This divergence is notable; ETF flows typically mirror retail sentiment, while on-chain data reflects the actual behavior of the market. The current situation signals a growing uncertainty rather than a definitive bearish trend.
ETF Selling Trend and Market Behavior
On Friday alone, spot Bitcoin ETFs experienced net outflows of $103.5 million, extending the sell-off streak to five trading sessions. These figures were reported during a shortened U.S. trading week due to the Martin Luther King Jr. Day holiday. Overall, total ETF outflows reached approximately $1.72 billion within the five-day timeframe, coinciding with Bitcoin trading below the crucial psychological level of $100,000 for over two months.
At the time of reporting, Bitcoin was trading around $89,160 according to CoinMarketCap. The last occasion Bitcoin traded above $100,000 was on November 13. Market participants often analyze ETF flows to gauge retail participation and short-term sentiment. Persistent outflows typically indicate a decrease in conviction among spot buyers.
On-Chain Data Signals Easing Pressure
While ETF data points to risk aversion, on-chain indicators reveal a more complex narrative. Recent data on the Growth Rate Difference shows a reduction in selling pressure since late November. This metric declined to approximately -0.0013 in late November but has since improved to around -0.0009. This change implies that sellers are losing their grip, even though Bitcoin prices have yet to confirm a bullish reversal.
Analysts emphasize that this shift does not indicate a confirmed recovery but suggests that bearish control is diminishing as marginal selling slows. This dynamic helps explain why Bitcoin has managed to stabilize around critical levels despite ongoing ETF withdrawals.
Market Sentiment and Price Levels
Technical analysis reveals specific price zones influencing short-term market behavior. Bitcoin recently cleared a weekly imbalance between $96,000 and $98,000 before triggering a sharp sell-off. This decline pushed prices closer to the monthly opening, where buyers stepped in to defend levels, leading to a modest bounce.
The bounce 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 following a recent local high. Analysts caution that failure to hold weekly lows between $86,700 and $86,300 could expose Bitcoin to deeper tests near $84,400 and $83,400.
Current market expectations suggest a consolidation range between $91,400 and $86,300 before a directional breakout occurs. Analysts characterize this market structure as corrective rather than indicative of a trend reversal.
Extreme Fear Reflects Market Conditions
The sentiment data corroborates the cautious atmosphere enveloping crypto markets. The Crypto Fear and Greed Index recently recorded an “Extreme Fear” rating of 25, remaining in this territory since midweek. This reflects ongoing anxiety among market participants, with broader crypto sentiment weakening alongside Bitcoin”s consolidation.
Analytics firm Santiment describes the market as entering a “phase of uncertainty.” They note that retail traders are increasingly reducing their exposure, with funds and attention shifting toward more traditional assets. Observations of lower social activity often precede stabilization phases.
Furthermore, Santiment pointed to quieter signals, such as diminished supply distribution, as early indicators that a bottom could be forming. They advise a patient approach rather than aggressive positioning during this uncertain time.
Macro factors are also influencing Bitcoin”s narrative. Nik Bhatia, founder of The Bitcoin Layer, linked the prevailing weak sentiment in Bitcoin to the robust performance of precious metals, noting that the current atmosphere resembles sentiments from the post-FTX era. Bhatia maintains a bullish outlook but acknowledges the emotional difficulty traders face amid fear-driven markets.
In summary, the combination of ETF outflows, declining selling pressure, and extreme fear creates a complex backdrop for Bitcoin”s near-term outlook. Traders are closely monitoring whether Bitcoin can maintain levels above $86,300 and reclaim liquidity zones near $93,000 in the weeks ahead.
