Bitcoin ETF Redemptions and the AI Narrative Rotation: Who is Draining Liquidity from the Crypto Market?
Bitcoin is experiencing its sharpest pullback since 2022, with prices falling over 50% from the October 2025 all-time high of $126,000 to around $60,000. According to Wintermute, this decline is primarily driven by massive outflows from U.S. spot Bitcoin ETFs—totaling $6.2 billion since November—and a significant capital rotation into AI-themed equities.
The report highlights that U.S.-led selling pressure is evident through negative Coinbase premiums and heavy OTC selling. Moreover, the AI narrative has been absorbing liquidity that previously flowed into cryptocurrencies and software stocks, contributing to Bitcoin’s underperformance versus traditional asset classes during the downturn.
Structural recovery in Bitcoin, Wintermute argues, depends on three key indicators turning positive: Coinbase premium, ETF flow reversal, and stabilized basis rates. Until then, sustained upward momentum remains unlikely. As of publication, Bitcoin traded around $69,700, down 0.3% in 24 hours.
marsbit02/11 08:51