Bitcoin liquidity just evaporated – and now this Wall Street feedback loop could wipe out gains

U.S. spot Bitcoin ETFs experienced three consecutive trading sessions of net outflows this week, totaling $1.58 billion, following earlier large inflow and outflow streaks in January. The selling pressure is concentrated in the largest funds, like BlackRock's IBIT and Fidelity's FBTC, suggesting a broad pullback in real-money demand rather than minor reallocations. This dynamic creates a negative feedback loop: in an outflow regime, the marginal bid supporting rallies thins, and redemptions add supply when discretionary buyers are already stepping back. This effect is amplified because current order-book depth is about 30% below 2025 highs, meaning flow-driven selling has a greater price impact. The macro backdrop, including volatility in Treasury yields due to geopolitical uncertainty, frames these ETF redemptions as observable de-risking behavior. Furthermore, positioning around late-January options, with call open interest clustered near $100,000, means sustained negative flows could prevent rallies from holding key levels. Investors are watching the persistence of outflows, whether selling broadens beyond the largest funds, and Bitcoin's ability to absorb negative flow days without sharp declines, as the market currently operates under macro-first constraints.

(Source：CryptoSlate)