Bitcoin bulls retreat as spot BTC ETF outflows deepen and macro fears grow

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Key takeaways:

Bitcoin ETF outflows of $2 billion since Oct. 29 intensified market pressure and erased optimism around institutional demand.
Weak corporate earnings and macro risks suggest Bitcoin could fall below $100,000 before buyers regain confidence.

Bitcoin (BTC) took an unexpected turn on Thursday, retesting the $101,500 support and triggering over $135 million in liquidations from leveraged bullish BTC futures positions. Bitcoin derivatives indicate that bullish momentum has all but vanished, leaving traders to question whether the $100,000 support can withstand further pressure.

Bitcoin’s monthly futures premium relative to the spot market briefly hovered near neutral levels on Thursday before slipping below the 5% threshold, a signal of fading demand for bullish exposure. The 2.5% decline in BTC since Wednesday mirrored worsening sentiment in equities, as the Nasdaq index dropped 1.6%, wiping out gains accumulated over the previous two weeks.

With no major crypto-specific news or catalysts, analysts say the prevailing fear stems from broader macroeconomic factors. They point to stretched valuations and potential energy constraints tied to artificial intelligence chip production, as evidenced by the 5% decline in Qualcomm (QCOM) shares and a 7.5% drop in AMD (AMD) shares, despite the companies posting solid earnings growth.

Adding to the uncertainty, investors worry that the ongoing US government shutdown has already begun to weigh on consumer spending. Shares of DoorDash (DASH), Pinterest (PINS), and Duolingo (DUOL) tumbled Thursday following weaker-than-expected quarterly results. Sentiment deteriorated further after the US Supreme Court questioned President Trump’s authority to impose import tariffs.

Demand for put (sell) Bitcoin options surged, pushing the skew metric to 14%, a highly unusual level well above the 6% neutral mark. The weak appetite for neutral-to-bullish options strategies reflects a broader fear of correction as global economies show increasing signs of strain. As a result, it may take longer for Bitcoin bulls to regain the confidence needed to push prices back toward $110,000 and beyond.

Bitcoin’s price dip to $100,300 on Thursday did not lead to a drop in BTC futures open interest, suggesting that bullish traders likely added margin to avoid liquidation. This behavior signals a tentative vote of confidence that the $100,000 support will hold, easing some of the tension created by extreme positioning in the BTC options market.

Traders favor cash over Bitcoin amid equity market risks

Cryptocurrency traders, however, remain worried that liquidity has been sharply reduced since the Oct. 10 crash, fueling volatility spikes. Even though Bitcoin is uniquely positioned to benefit from capital outflows from equities, many traders prefer to hold cash as a safeguard against a sudden stock market sell-off.

The massive $2 billion outflows from Bitcoin exchange-traded funds (ETFs) since Oct. 29 have added further downward pressure. At the same time, the net asset premium of publicly listed companies holding strategic Bitcoin reserves has collapsed, eliminating the incentive to issue new shares at current valuations.

It remains uncertain whether the recent wave of disappointing corporate earnings is linked to the US government shutdown or signals the onset of a recession. Bitcoin bulls will likely wait for clearer signs from macroeconomic indicators before stepping back in, leaving the possibility of a correction below $100,000 still on the table.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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