Bitcoin critical demand metric turns negative and ETFs wiped out $1.1 billion in 72 hours

US-listed spot Bitcoin ETFs have suffered three consecutive sessions of heavy redemptions of more than $1 billion.

The velocity of this U-turn is surprising, considering this year began with a bang. On the first two trading days of this year, the 12 Bitcoin ETF products combined to haul in nearly $1.2 billion.

However, that inflow strength has given way to outflows.

From Jan. 6 through Jan. 8, those same funds hemorrhaged capital, posting net outflows of $243.2 million, $486.1 million, and $398.8 million, respectively.

The three-day bloodletting totaled roughly $1.13 billion, effectively netting the month’s flows to a negligible positive balance of around $40 million.

According to CryptoSlate's data, Bitcoin price action mirrored this volatility. On Jan. 8, the top crypto asset traded above $94,000, then tested support below $90,000.

The liquidity trap

The composition of the selling suggests this was not a retail panic but a structural de-risking by larger players using the most liquid instruments available.

Indeed, the heaviest selling days saw the sector’s giants—BlackRock’s IBIT and Fidelity’s FBTC—leading the exits.

However, focusing solely on daily ETF churn may miss the broader signal.

Analysis from CryptoQuant suggests that attempting to time the market based on these flow optics is increasingly futile.

CryptoQuant CEO Ki Young Ju noted that capital inflows into the broader Bitcoin network have effectively dried up, and liquidity channels have become too diverse for any single metric to tell the full story.

Crucially, Ju argued that the market has evolved past the simplistic “whale-retail” dump cycles of previous eras.

He noted that the presence of massive institutional holders with infinite time horizons, most notably MicroStrategy, which holds a treasury of 673,000 BTC, provides a floor that didn't exist in prior bear markets.

With these entities unlikely to liquidate, the probability of a catastrophic 50% crash from all-time highs is muted. Instead, the base case is shifting toward a regime of “boring sideways” price action as capital rotates out of crypto and into equities and other hard assets.

The on-chain warning light

While the floor may be higher, internal momentum signals are flashing yellow.

Data from CryptoQuant reveals that Bitcoin’s “apparent demand” on a 30-day basis has slipped back into negative territory, suggesting that new capital absorption is no longer keeping pace with effective supply.

This shift reflects a familiar macro-onchain pattern: long-term inactive coins re-enter circulation just as fresh demand weakens.

The divergence becomes stark when comparing price action with this 30-day change in demand. In previous cycles, sustained positive demand tended to validate strong price advances.

Currently, however, the price is stabilizing while demand remains structurally soft.

This indicates that recent rebounds are likely driven by short-term positioning rather than durable spot accumulation.

Without a clear recovery in on-chain demand metrics, upside moves may continue to face selling pressure from both short-term holders and previously dormant supply re-entering the market.

Notably, this aligns with the warning signs from the Market Value to Realized Value (MVRV) ratio, a key gauge of network profitability that has begun to trend lower.

The declining MVRV indicates that network-wide unrealized profits are no longer expanding at the velocity seen during the bull run’s peak.

Currently, the metric sits in a fragile middle ground: It remains well above the “value zone” that typically attracts contrarian accumulation, yet lacks the momentum to justify a sustained premium.

In this no-man's-land, the asset becomes hypersensitive to negative catalysts.

Macro headwinds and gold

Meanwhile, the stagnation in crypto demand is not happening in a vacuum; it coincides with a historic resurgence of its analog predecessor, gold, and the broader macro environment.

Data from The Kobeissi Letter has highlighted a dramatic shift in the global monetary order. The US dollar’s share of global currency reserves has fallen to approximately 40%, its lowest level in two decades and an 18-percentage-point drop over the last 10 years.

Conversely, gold’s share of reserves has climbed to 28%, a high not seen since the early 1990s. This rise has allowed the bullion to now constitute a larger share of global foreign exchange reserves than the euro, yen, and British pound combined.

The Kobeissi Letter noted that this is not a retail frenzy but a sovereign shift. Central banks are diversifying away from the greenback and stockpiling metal.

This drove gold prices to a 65% rally in 2025, the largest annual gain since 1979, while the US Dollar Index suffered its worst performance in eight years.

However, a short-term dollar resurgence, which hit a one-month high this week, is complicating the picture.

This comes as the market is positioning for a potentially resilient US labor report.

The stakes for this data print are high. A stronger-than-expected jobs report would likely reinforce the dollar’s recent strength and push rate-cut expectations further out, weighing heavily on both gold and Bitcoin.

Conversely, a weak report could reignite the liquidity hopes that fueled the year’s brief, early rally.

For now, the $1 billion outflow streak serves as a reality check. The ETF ecosystem has matured, but that maturity has brought correlation, not decoupling.

With apparent demand turning negative and global capital rotating back into physical safe havens, Bitcoin appears set for a period of stagnation, caught between a high institutional floor and a ceiling of macro indifference.

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