Key takeaways:
– Heavy outflows from Bitcoin exchange-traded funds and massive liquidations show the market is purging highly leveraged buyers.
– Bitcoin options metrics reveal professional traders are hedging for further price drops amid a tech stock sell-off.
Bitcoin (BTC) fell below $73,000 on Wednesday after briefly retesting $79,500 on Tuesday, tracking a slump in the tech-heavy Nasdaq following weak guidance from AMD and soft U.S. employment data. Traders worry about continued downward pressure after spot Bitcoin ETFs saw over $2.9 billion in outflows across 12 trading days.
US-listed Bitcoin ETFs have averaged roughly $243 million in daily net outflows since Jan. 16, a period that nearly coincides with Bitcoin’s rejection near $98,000 on Jan. 14. The ensuing 26% correction over three weeks triggered about $3.25 billion in liquidations of leveraged long BTC futures; any positions using more than roughly 4x leverage would have been wiped out unless additional margin was posted.
Some participants link the recent volatility to the lingering impact of the Oct. 10, 2025, $19 billion liquidation event at Binance, which followed a database query performance glitch that delayed transfers and produced incorrect data feeds. Binance acknowledged technical issues during that sell-off and compensated users with over $283 million. Haseeb Qureshi, managing partner at Dragonfly, noted that large liquidations “could not get filled, but liquidation engines keep firing regardless,” which wiped out market makers and left them unable to stabilize the market immediately. He added that while the crash didn’t permanently “break the market,” market makers will need time to recover.
Exchange liquidation mechanisms, analysts say, are designed to minimize insolvency risk rather than provide the circuit-breaker-style self-stabilization seen in traditional finance. As a result, repeated technical failures or clustered liquidations can amplify stress.
Options markets show professionals remain skeptical that Bitcoin has bottomed. The 30-day 25% delta skew (put-call) on Deribit climbed to about 13% on Wednesday, well above the roughly 6% neutral threshold, signaling elevated demand for downside protection. That demand reflects not only macro and tech-sector worries—fears of intensified competition as Google and AMD push proprietary AI chips—but also lingering rumors that have unsettled traders.
Two unfounded stories circulating recently heightened unease: a reported $9 billion Bitcoin sale by a Galaxy Digital customer that was linked to quantum-computing concerns (Galaxy’s Alex Thorn denied the quantum explanation), and renewed speculation about Binance’s solvency after brief technical issues halted withdrawals. On-chain metrics indicate Bitcoin deposits at Binance have remained relatively steady, however.
Given the uncertain macro picture, many traders have chosen to exit crypto positions, which complicates efforts to predict whether ETF outflows will continue to pressure price. For now, heavy ETF withdrawals, elevated options skew, and the memory of large liquidations suggest downside risk remains elevated.
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