Bitcoin ETF funding data presents a stark contrast, with some sensational headlines exaggerating the impending sell-off, but core data reveals it to be more of a technical adjustment than a long-term withdrawal.
Although the market is currently under cyclical pressure, with investors having lost approximately $100 billion, miners reducing their computing power, and treasury companies' stock prices falling below Bitcoin's book value, the ETF market has not shown signs of impending doom.
According to Checkonchain data, although 60% of ETF inflows occur during periods of rising prices, the assets under management of Bitcoin-denominated ETFs only saw outflows of 2.5% (approximately $4.5 billion), a very small percentage of the total assets under management.
The key point is that these outflows coincided with the reduction in open interest in CME futures and IBIT options, confirming that it was a structural liquidation of basis or volatility trades rather than a collapse in market confidence.
Last week, fund flows exhibited two-way fluctuations, with net inflows and outflows alternating. There were no signs of a run on the market indicating a prolonged decline, and trading volume continued to fluctuate downwards, essentially reflecting position adjustments rather than withdrawals. Bitcoin prices also fluctuated in both directions during the same period, suggesting that ETF fund flows were not the dominant factor.
The derivatives market further corroborates this assessment, with CME futures open interest falling from $16 billion in early November to $10.94 billion, indicating a continued reduction in risk.
While the total open interest in global futures contracts still stands at $59.24 billion, CME and BN each account for $10.9 billion, a balanced distribution that reflects the market's redistribution of risk across different venues and instruments, rather than a general sell-off.
The market's core focus is on three key price support levels. $82,000 (the real market average and ETF cost) is the critical point for whether the rebound can continue; $74,500 (Strategy's holding cost) tests the market's narrative resilience; and a breach of the $70,000 level could trigger a full-blown bear market panic.
At the same time, the current market liquidity is uneven, and in a tense environment, it can amplify or dilute the impact of capital flows.
The key to determining whether a market is shifting from consolidation to capitulation lies in distinguishing between technical outflows and genuine withdrawals.
The outflow of funds in tandem with the reduction of open interest is a technical adjustment; if there is a continuous large-scale outflow of funds that weakens the asset size, and open interest remains stable or increases, it is a signal of the establishment of new short positions and the selling of long positions.
Currently, the market is more of a "shrinkage" than a "collapse." Going forward, it is important to pay close attention to changes in hedging positions, the holding of key price levels, and the order book's capacity to absorb losses.
