Coinbase Raises Alarm: Bitcoin Faces Pressure Due to ETF Outflows and Whale Departures

Summary:
Coinbase Institutional warns investors about Bitcoin's struggle as it breaks critical price support levels. Key factors include significant ETF outflows, the exit of large investors, known as "whales," and declining valuations of digital asset treasuries. With Bitcoin trading below its 200-day moving average, cautious strategies are advised in the current market climate.

Key Takeaways

Bitcoin is under pressure, now trading below $93,000 after a 32% drop from its recent peak.
Major technical support levels have been breached, creating a lack of price stability.
There is a noticeable decline in demand for ETFs and digital asset treasury holdings.
The liquidity of stablecoins is shrinking, which may affect future buying power in the crypto market.
While current market indicators show a bearish trend, some experts believe Bitcoin's market dynamics are changing compared to past cycles.

Coinbase Raises Alarm: Bitcoin Faces Pressure Due to ETF Outflows and Whale Departures

Bitcoin Faces Downward Pressure

Coinbase Institutional has issued a warning about the state of Bitcoin as it has broken through essential support levels. This warning reflects several concerning trends, including extraordinary outflows from Exchange-Traded Funds (ETFs), whales—large individual investors—selling off their holdings, and a drop in valuations for digital asset treasuries. Currently, Bitcoin is testing the $93,000 level after experiencing a 32% decline from its recent highs exceeding $126,000, and it is trading notably below its 200-day moving average.

Bitcoin chart Under Pressure

The latest analysis from Coinbase highlights a range of negative factors impacting Bitcoin's trajectory. “Given the current market situation, we believe that breakout trades are more favorable compared to attempting to catch falling knives,” Coinbase cautioned, recommending vigilance as monetary tightening concludes and the Federal Reserve re-engages in bond markets.

Broken Support Levels Signal Caution

Bitcoin has repeatedly shattered major technical and on-chain support levels that have historically supported rally trends. As outlined in Coinbase's November report, Bitcoin now trades below its short-term holder cost basis and has fallen beneath the 75% profit margin that once provided a stabilizing influence in previous market cycles. This shift has resulted in a troubling absence of clear price floors.

The area around $98,000-$100,000, which had previously served as a stronghold for investors, has crumbled without much attempt to bounce back, prompting current holders to face significant realized losses reminiscent of the aftermath of the November 2022 FTX crisis.

Bitcoin technical and on-chain bull market support bands

With short-term investors eager to cut losses, the risk of mass capitulation is increasing, further pressing prices down. The rapid descent through the $90,000-$85,000 range highlights a significant lack of organic demand to cushion declines, as the distribution of cost basis has thinned out beneath current trading levels.

Options markets have shifted from a hesitant stance to a defensive one, with the Bull-Bear Index now displaying a definite negative trend for both short and mid-term timeframes. Traders are leaning towards purchasing downside protection instead of seeking opportunities for upside gains, indicating prevailing uncertainty in the market.

Long-term holder (LTH) and exchange net position change vs price

Furthermore, changes in long-term holders' net positions have turned negative over the past 30 days. A recent analysis by Arkham identified a prominent Bitcoin whale that exited an 11,000 BTC position, valued at around $1.3 billion, between late October and November.

Declining Demand for ETFs and Treasuries

Bitcoin has seen a significant reversal in ETF flows, which used to be a primary driver of demand. November 2025 recorded unprecedented net outflows as the trailing seven-day totals moved sharply into negative territory after Bitcoin breached essential price levels.

Trailing-7-day net BTC spot ETF flows

When allocators redeem ETF shares, issuers are required to sell spot Bitcoin or lessen their hedging strategies, exacerbating risk-off trends across markets. Currently, U.S. spot Bitcoin ETFs manage assets totaling $168 billion and hold about 1.36 million BTC, equivalent to 6.9% of the total circulating supply.

Demand for digital asset treasuries has also diminished, with companies seeing their market values drop below their net asset values for the first time since 2024. This trend has led multiple treasury vehicles to trade at a discount compared to their underlying Bitcoin assets, raising concerns as shareholders may pressure management to halt purchases, hedge their positions, or sell assets.

For example, the company Strategy has revealed the establishment of a $1.44 billion cash reserve intended to meet 21 months of obligations while also updating its fiscal guidance. The guidance indicates projected operating results that could range from a $7 billion loss to a $9.5 billion gain, depending on Bitcoin's price at year-end. This market shift precedes MSCI's upcoming decision on January 15, 2026, regarding the exclusion of companies holding over half their assets in crypto from global indices, which JPMorgan estimates might lead to institutional selling between $2.8 billion and $8.8 billion.

Stablecoin Liquidity Weakens

The liquidity of crypto-native stablecoins is diminishing as the overall supply contracts, following steady growth until October. The weak 30-day momentum indicates a decrease in supply, highlighting deleveraging and capital migrating away from on-chain to fiat or more secure assets.

Stablecoins, which have seen their circulation surpass $300 billion, are now experiencing a contraction that reflects lower available capital for future buying in the crypto market—even as they continue to process a daily transfer volume of $225.6 billion.

Stablecoin supply growth momentum

In spite of these challenges, Grayscale Research has recently countered the prevailing pessimism by arguing that Bitcoin's current market structure differs significantly from what has been observed in previous cycles. The asset manager believes that with increased dominance from exchange-traded products and corporate treasuries, Bitcoin is unlikely to undergo the same lengthy decline seen in the past.

Elevated put skew suggests hedging of downside risk

Technical indicators such as heightened put option skew and signs of capitulation among traders indicate that a formation of a market bottom may be in progress, supported by ongoing accumulation efforts from larger investors.