decrypt.co
U.S. spot Bitcoin exchange-traded funds clocked a three-day streak in outflows on Thursday, as new year optimism fades and traders reprice risk.
Bitcoin ETFs recorded $205.5 million in outflows for the day, bringing the three-day cumulative netflow to $934.8 million, according to Farside data.
Inflows have outpaced outflows on just two days since the year began. Still, the 7-day net flow—calculated as the sum of all flows over a given period—remains positive at $240.7 million.
Although a lagging indicator, ETF flows often reflect crypto market sentiment. They also help reinforce the direction of an asset’s underlying price.
Bitcoin’s year-to-date gains have halved from 8% on Wednesday to 4% on Thursday. The top cryptocurrency is trading flat over the last 24 hours at $91,100 after briefly dipping below $90,000 yesterday, according to CoinGecko data.
“It’s not surprising to see ETF investors doing a bit of de-risking,” Sean Dawson, head of research at on-chain options platform Derive, told Decrypt. “The current flows are more reflective of tactical positioning and sentiment shifts than a sudden collapse in underlying demand.”
He cited a combination of factors for the ongoing outflow: capital reallocation after year-end, Bitcoin's failure to break resistance at approximately $92,000, increased macroeconomic uncertainty following the U.S. operation in Venezuela, and worsening U.S. economic indicators, such as rising jobless claims.
What’s stopping Bitcoin’s recovery?
The retreat in ETF demand aligns with a significant on-chain supply wall.
The start-of-year rally pushed Bitcoin above $94,000, into a zone dominated by recent top buyers, whose cost basis is tightly clustered between $92,100 and $117,400, according to Glassnode’s Wednesday report.
“The market now faces rising breakeven sell-side pressure, as these investors regain the opportunity to exit positions without realizing losses,” Glassnode analysts noted. “Consequently, any attempt to revive a sustained bull phase will likely require time and resilience to absorb this overhead supply.”
Pointing to the options market, Dawson noted a signal to the end of the “early-January upside chase,” with short-dated call skew flipping negative again as momentum failed.
“Overall, upside looks capped, and the market expects consolidation over the next few weeks,” he said.
If Bitcoin stabilizes and re-tries a recovery rally, the short-term holder cost basis of $98,900 will be the next significant level to watch.