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Bitcoin Falls Sharply as ETFs Show Outflows and Holder Selling Surges
Bitcoin has fallen below the $99,000 level following a nearly 4% decline from Thursday’s intraday peak of $103,690, according to CoinGecko data. This pullback mirrors a broader risk-off sentiment sweeping through traditional markets.
US Government Shutdown Aftermath Creates Market Uncertainty
With the Nasdaq down approximately 2%, Bitcoin posted similar losses on the same day. Ryan McMillin, Chief Investment Officer at Merkle Tree Capital, attributes this crypto market movement to the uncertainty following the US government’s reopening after its longest shutdown.
“The funding bill only provides short-term relief. Investors are now focusing on the damage already done,” McMillin explains. He points to weeks of missing economic data and a federal statistical system described as permanently damaged as key concerns weighing on markets. The White House’s confirmation that October’s jobs report will be released without the unemployment rate has further compounded these worries.
Major Investors Rapidly Offloading Bitcoin Holdings
According to a Thursday report from Glassnode, the distribution rate among long-term Bitcoin holders has reached critical levels. The 30-day change in supply held by these investors shows a sharp decline, and this trend is accelerating rapidly.
CryptoQuant analysts identified that long-term holders have sold approximately 815,000 BTC over the past month. This figure pushes selling pressure to its highest level since January 2024. “Long-term holder selling hit one of the highest levels so far this year as prices reached new highs, while demand simultaneously started to contract,” the analysts noted in their report.
Demand Side Shows Significant Weakness
Charlie Shery, Head of Finance at Australian crypto exchange BTC Markets, emphasizes that whale selling alone isn’t typically significant. However, the current situation is different. “What makes it notable now is the lack of meaningful bid support on the buy side to absorb that selling. Earlier in the cycle, ETFs and MicroStrategy were providing steady demand,” Shery explains, adding that without these buyers, the sell-heavy flow appears to be driving Bitcoin’s steady decline.
Net outflows from spot Bitcoin ETFs, reduced US buying pressure indicated by a negative Coinbase premium, and a broader contraction in apparent demand are making the situation more complex. According to CryptoQuant analysts, the combination of these factors is deepening market weakness.
Critical Support Level Under Threat
Users on prediction market Myriad have assigned a 56% probability that Bitcoin will hit $115,000 before dropping to $85,000. This percentage has fallen from Wednesday’s 68%, indicating deteriorating market participant expectations.
McMillin suggests that Bitcoin’s range trading since early August could end if the $98,000 level fails to hold. The expert notes that in such a scenario, the price could retreat into the $90,000 territory, similar to what occurred in June.
Given the current market uncertainty and weakness on the demand side, Bitcoin’s direction in the coming days appears heavily dependent on whether critical support levels can hold against mounting selling pressure.
