Bitcoin’s slide to $84,000 is being driven less by mood and more by mechanics, according to Greg Cipolaro, Global Head of Research at NYDIG. In a report, Cipolaro said the core engines of the 2024–25 rally have shifted into reverse.

Spot bitcoin ETFs, once the primary source of demand for the cycle, now exhibit persistent redemptions. Those vehicles funneled billions into bitcoin during the first half of the year, the report points out, but trailing five-day flows have turned negative.

Data from SoSoValue shows that these ETFs are on track to register their highest monthly outflow since launch, having bled out $3.55 billion so far in November, just shy of the $3.56 billion record outflow seen in February.

Read more: Bitcoin ETFs Have Bled a Record $3.79B in November

Aggressive capital flight

Stablecoins are flashing a similar signal.

The total supply has dipped for the first time in months, and the algorithmic USDE token has lost nearly half of its outstanding supply since the Oct. 10 liquidation shock. NYDIG’s Cipolaro said this drop points to money leaving the market rather than moving to the sidelines.

“Given its role in the selloff, where it fell to $0.65 on Binance, its rapid contraction underscores how aggressively capital has been pulled from the system,” he wrote.

The report suggests that other factors point to capital outflows.

Corporate treasury trades built around DAT share premiums relative to net asset value have also broken down. As those premiums flipped to discounts, firms that once issued stock to buy bitcoin are now selling assets or buying back shares. Sequans, for example, has earlier this month unloaded BTC to cut debt.

“Importantly, while these reversals mark a clear shift from a once-strong demand engine to a potential headwind, no DAT has yet shown signs of financial distress,” Cipolaro pointed out. “Leverage remains modest, interest obligations are manageable, and many DAT structures allow issuers to suspend dividend or coupon payments if needed.”

Large bitcoin purchases during the dip, including those from Strategy and the country of El Salvador, failed to stop the price drop. To Cipolaro, the “fact that these sizable purchases didn’t even slow the decline is telling.”

He argued that these reversals form a feedback loop set off by the $19 billion liquidation event on Oct. 10. The mechanisms that once pushed prices higher are now reinforcing the decline.

In his view, investors should “hope for the best, but prepare for the worst," noting that “the long-term thesis is still alive, but the near-term environment may be shaped by well-worn cyclical mechanics."

“History suggests the next stretch could be bumpy, but secular conviction remains an important asset for long-term investors,” Cipolaro added.

Read more: Crypto Liquidity Still Hollow After October Crash, Risking Sharp Price Swings