Bitcoin ETFs See $1.72B Outflows as Market Sentiment Turns Bearish

Bitcoin ETFs experienced a sharp reversal in momentum as significant outflows erased much of the recent gains, according to data from SoSo Value. Over a five-day period, nearly $1.72 billion exited spot Bitcoin ETFs, pushing total net asset value down to $115.88 billion from $124.56 billion recorded on January 16. This sustained withdrawal trend reflects a cooling sentiment among investors rather than a single-day shock.

BlackRock’s iShares Bitcoin Trust (IBIT) emerged as one of the largest contributors to the outflows, reporting $101.62 million in redemptions. Fidelity’s Wise Origin Bitcoin Fund (FBTC) followed as the second-largest contributor, with $1.95 million in net outflows. As a result, cumulative net inflows across all Bitcoin ETFs declined to $56.49 billion from $57.82 billion, highlighting the impact of consistent redemptions over multiple sessions.

The outflow trend began on January 16, when $394.68 million left Bitcoin ETFs, ending a four-day inflow streak that had added $1.81 billion. After markets reopened on January 20 following the weekend, redemptions resumed immediately with $483.38 million in net outflows. Selling pressure intensified on January 21, which marked the largest single-day outflow at $708.71 million. Although outflows briefly slowed to $32.11 million on January 22, they accelerated again the following day.

Trading activity also weakened alongside the ETF outflows. Daily trading volume fell to $3.36 billion by January 23, down from $5.51 billion recorded just two days earlier, signaling reduced investor engagement.

Broader market indicators have reinforced the bearish outlook. A Coinbase Institutional survey revealed that 26% of institutional investors now believe the crypto market is in a bear phase, a sharp rise from September levels. On-chain data from CoinGlass showed the Coinbase Bitcoin Premium Index remained negative for nine consecutive days, while the Fear and Greed Index registered extreme fear at 25. Glassnode data further indicated persistent selling pressure, with much of Bitcoin’s circulating supply currently held at a loss, adding to downside risk despite Bitcoin trading around $89,400 at press time.