Institutional Outflows & Liquidation Storm Deepen the Crypto Crash
As we wrap up our breakdown of the ongoing crypto market plunge, let’s look at two more critical reasons behind the downturn:
3. Capital Outflows from Bitcoin Spot ETFs
Institutional investors are pulling back. Spot Bitcoin ETFs saw a massive $114.8 million in outflows, led by major players like Fidelity’s FBTC, ARK 21Shares’ ARKB, and Grayscale’s GBTC.
This signals a clear rotation of capital and institutional sell-off, adding further pressure on the market.
As a result of breaking key support at $116,950, analyst Ali Martinez predicts the next support level could fall as low as $107,000 for Bitcoin.
4. Massive Sell-Off and Widespread Liquidations
The market also experienced a “liquidation storm” worth nearly $1 billion, impacting nearly 200,000 traders in just 24 hours.
The largest single liquidation? An ETH/USDC position on Binance, worth $13.79 million.
These large-scale forced liquidations have sparked a domino effect of panic selling, further driving prices down.
5. On-Chain Signals of Profit-Taking Risk
On-chain data reveals that over 90% of Bitcoin supply has remained in profit for over a month a setup often followed by profit-taking sell-offs.
Glassnode warns that a break below the Cumulative Mean +1 Standard Deviation level could trigger a fresh wave of selling.
Meanwhile, the BTC price spread on Coinbase has turned negative, hinting at weakening U.S. buyer interest and decreasing demand from retail and institutional players alike.
While volatility is nothing new in crypto, this confluence of macro, institutional, and technical pressures is creating a perfect storm. Risk management and strategic entry are more important than ever.
The market remains highly volatile, and while corrections are part of the cycle, caution and risk management are key.
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