Bitcoin ETFs Experience $349M Outflow in One Day as Whales Sell, Retail Buyers Step In: Analyst Insights

Bitcoin

Spot Bitcoin ETFs in the U.S. witnessed their largest single-day withdrawal in nearly three weeks, with $349 million taken out from all 11 products. This comes as Bitcoin prices fell back toward $68,000, after hitting nearly $74,000 earlier in the week. Large holders, referred to as whales, have been selling off their assets, while smaller investors are increasing their purchases amid the downturn.

Key Takeaways

Spot Bitcoin ETFs saw a significant outflow of $349 million in one day.
Large holders (whales) sold substantial amounts of Bitcoin, while smaller investors are buying more.
The Crypto Fear & Greed Index has dropped, indicating extreme fear in the market.
Analysts warn of a potential price drop if support levels are not maintained.

Major Holders Sell While Smaller Investors Accumulate

According to data from Farside, U.S. spot Bitcoin ETFs experienced their most significant single-day outflow in almost three weeks, with $349 million removed from all 11 products combined on Friday. This sell-off occurred as Bitcoin's price retreated towards $68,000, after briefly reaching around $74,000 earlier in the week. The sudden price increase seems to have prompted large holders to initiate a substantial wave of selling.

Crypto analytics firm Santiment examined the actions of Bitcoin wallets holding between 10 and 10,000 BTC—often called whales. The data showed that these major holders had been actively accumulating Bitcoin during the period between February 23 and March 3, when prices remained within the range of $62,900 to $69,600. However, once Bitcoin crossed the $74,000 threshold on Wednesday, these wallets started to liquidate their positions, ultimately selling approximately 66% of their 10-day accumulation by Friday.

Conversely, smaller investors, who own less than 0.01 Bitcoin, have been capitalizing on lower prices and increasing their investments in Bitcoin as it fell.

Whales and Retail Investors

According to Santiment, this contrasting behavior between large and small holders has previously signified potential further declines. The platform noted, “When retail buys while whales sell, it typically suggests the correction is not yet finished,” in their report released on Friday.

Market Sentiment Turns Negative

The decline in Bitcoin's price has caused the Crypto Fear & Greed Index to decrease six points to a score of 12, indicating a state of "Extreme Fear." This index assesses market sentiment based on various factors such as volatility, trading volume, and social media engagement.

Crypto Fear & Greed Index

Some analysts believe Bitcoin may continue to experience downward pressure if buyers are unable to uphold the current price zone. If the support around the $67,000 to $68,000 range is breached, it could lead to a further drop to recent lows, potentially to gather liquidity before any rebound.

However, not all experts foresee a downturn. Economist Timothy Peterson highlighted the Bitcoin Price to Metcalfe Value chart—a model that evaluates Bitcoin's price in relation to the estimated value of its network based on user activity—and indicated that the $60,000 mark has historically served as a bottom in previous cycles.

Bitcoin Price Chart

“There’s about a 99.5% chance it stays above $60,000,” Peterson stated on X.

Bitcoin had previously tested the $60,000 level on February 6 during a broader market pullback from the all-time high of $126,000 achieved in October. Although it has seen a partial recovery since then, the ETF outflows on Friday combined with persistent selling from whales indicate that the market has not yet stabilized.

Featured image from Shutterstock, chart from TradingView