Bitcoin ETFs See Five Consecutive Days of Outflows as Bull Trap Fears Grow

Bitcoin’s latest attempt to recover is facing another significant obstacle as institutional investors continue withdrawing capital from the market. US spot Bitcoin ETFs have recorded five consecutive sessions of net outflows, with approximately $1.44 billion leaving these investment products between November 5 and November 11.

BTC is currently trading near $73,500 and remains unable to break back above the $75,000 mark. The persistent ETF withdrawals have raised a broader concern among investors: Is the cryptocurrency market heading toward another bull trap?

The timing of these withdrawals has made the situation more concerning. Bitcoin briefly climbed above $80,000 on November 4 before reversing sharply the following day. Since then, the broader crypto market has struggled to regain upward momentum, raising doubts about whether recent dip buyers entered their positions too early.

The latest withdrawal figures show that Bitcoin ETFs lost $430.2 million on November 5, followed by another $411.9 million on November 6. Net outflows continued on November 9, 10, and 11, extending the negative trend.

BlackRock’s iShares Bitcoin Trust (IBIT) contributed the largest share of the selling pressure, recording $269.7 million in net withdrawals in the latest session.

Bitcoin ETF Outflows Intensify Concerns About Another Bull Trap

The continued withdrawal streak suggests that institutional demand is not providing enough support for Bitcoin’s recovery. Five consecutive sessions of net outflows have drained approximately $1.44 billion from US spot Bitcoin ETFs, with BlackRock’s IBIT responsible for roughly three-quarters of the total withdrawals.

However, institutional interest has not completely disappeared. Morgan Stanley’s Bitcoin ETF recorded $9 million in inflows in the latest session, providing a modest sign of continued demand despite broader selling pressure.

Glassnode’s latest Week 46 report offers another bearish signal. Bitcoin has slipped below the short-term holder cost basis of $75,600, leaving investors who purchased BTC recently with unrealized losses.

The analytics firm also highlights declining stablecoin supply alongside persistent ETF withdrawals. Both trends suggest that fresh liquidity is struggling to enter the cryptocurrency market.

These conditions create a challenging environment for investors attempting to buy the latest dip. A temporary price rebound could encourage retail traders to enter the market, only for renewed selling pressure to push Bitcoin lower again.

Bitcoin Must Reclaim $75,600 to Improve Its Recovery Outlook

Bitcoin’s derivatives market provides additional insight into current investor positioning. BTC futures open interest remains above $50 billion, while funding rates are still positive. This suggests that leveraged traders continue paying to maintain bullish positions despite the recent price weakness.

At the same time, leverage is gradually leaving the market. Open interest has declined, indicating that some speculative positions have already been closed. Much of the leveraged long exposure around current price levels has also been liquidated.

This situation presents two potential outcomes. If fresh spot buying returns, the reduction in leverage could help Bitcoin recover with less risk of another major liquidation event. However, another unsuccessful breakout could leave remaining leveraged buyers vulnerable to additional losses.

For now, $75,600 represents the key recovery level. A sustained move above this threshold would put Bitcoin back above the short-term holder cost basis and potentially improve market sentiment.

A gradual advance toward $80,000 would provide stronger evidence that buyers are regaining control. Conversely, a breakdown below the $72,000 region could expose BTC to another decline toward $70,000.

There are also arguments against the bearish bull trap outlook. Accumulation activity has emerged among two major wallet cohorts, while selling momentum has started to weaken. These developments suggest that some investors are positioning themselves for a potential market recovery.

Ultimately, another sharp market crash is not necessary to trap cryptocurrency investors. A convincing rebound that attracts fresh buyers but fails to sustain its momentum could be enough to trigger another wave of losses.

About The Author

ctleditor

See author's posts