Will Bitcoin’s largest ETF withdrawal since July deepen BTC’s crash?

Key Takeaways

What triggered Bitcoin’s drop below $100K?

Over $492 million in liquidations and $577 million in ETF outflows pulled prices lower as institutions took profits.

What could help BTC recover next?

Strong retail accumulation on Coinbase and bullish Puell Multiple readings point to renewed upside potential near long-term support.

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Bitcoin [BTC] faced an intense selloff, with the asset slipping well below $100,000 for the first time since the 23rd of June.

The dip triggered about $492 million in liquidations over 24 hours, per Derivatives trackers. Even so, early demand returned as buyers tested discounted bids.

U.S. retail and broader market regain confidence

U.S. retail investors have been returning to the market following the previous day’s decline, with buying activity picking up across major exchanges.

The Coinbase Premium Index—a key indicator tracking the difference between Coinbase and offshore exchange prices—surged to -0.9, approaching the neutral-to-bullish zone (positive territory).

While retail sentiment has yet to turn fully bullish, the data suggested growing investor conviction as traders accumulate Bitcoin at perceived discount levels.

The broader market mirrored this shift. According to the Puell Multiple, one of Bitcoin’s on-chain valuation indicators, the metric climbed to around 0.9 at press time.

Historically, readings at this level imply ongoing accumulation and potential for further upside until the indicator reaches around 6, which often signals overvaluation and precedes a correction.

Historical levels reached

The recent market decline pushed Bitcoin into the 365-day Moving Average (MA) cross—a historically significant zone for identifying major price reversals.

This indicator has consistently marked pivotal turning points for Bitcoin.

For instance, in April, following a broad selloff influenced by former U.S. President Donald Trump’s tariff hike, Bitcoin entered this zone and subsequently rallied.

A similar pattern emerged in August 2024 when Bitcoin again rebounded after trading near this level. The asset has now revisited the same zone, hinting at another potential rally.

This range also aligns with the lower Bollinger Band, a zone that has frequently acted as a springboard for price rebounds. Based on this setup, Bitcoin could target the upper Bollinger Band—around $115,682—if buying momentum strengthens.

Institutional outflows pose a hurdle

However, institutional investors remain a key obstacle to a full-scale rally.

Data from Spot Bitcoin ETFs in the U.S. show that institutional holders continued to offload positions since the week began, adding downward pressure to prices.

According to SosoValue, the group recorded outflows of approximately $577 million, marking their largest single-day withdrawal since the 1st of July.

With a combined net asset value of about $134.5 billion, continued selling by institutional investors could dampen Bitcoin’s rebound potential and limit near-term upside momentum.

Speaking to Maria Carola, CEO of StealthEX, she cautioned that despite signs of bullish momentum returning to the market, downside risks remain in play.

“If the U.S. government shutdown continues and the Federal Reserve fails to deliver a clear stance on interest rates, the likelihood of Bitcoin retesting the $100,000 level remains high.”

She added that government uncertainty and weakening institutional demand could extend market volatility.