U.S.-listed spot Bitcoin exchange-traded funds experienced their second-largest single-day outflow on Thursday, with investors pulling $869.86 million from the 11 funds, according to data from SoSoValue. The massive withdrawal marks a dramatic shift in sentiment as Bitcoin's price fell below the psychologically significant $100,000 threshold and broader market turbulence rattled Wall Street.

The Thursday exodus represents the culmination of a three-week downward trend that has seen investors withdraw $2.64 billion from Bitcoin ETFs, signaling growing caution amid heightened volatility and shifting market dynamics. The only larger single-day outflow occurred on Feb. 25, 2025, when $1.14 billion left the funds during a broader crypto market sell-off triggered by tariff concerns and macroeconomic uncertainty.

Grayscale's Bitcoin Mini Trust led Thursday's outflows with $318.2 million, while BlackRock's iShares Bitcoin Trust recorded $256.6 million in net withdrawals. Fidelity's Wise Origin Bitcoin Fund saw $119.9 million exit, with additional outflows registered across funds from Grayscale's GBTC, ARK 21Shares, Bitwise, VanEck, Invesco, Valkyrie and Franklin Templeton.

The outflows coincided with Bitcoin's retreat from the six-figure milestone it briefly crossed earlier this week. As of Thursday afternoon, Bitcoin traded near $97,500, down more than 5% in 24 hours and approximately 11% on a month-to-date basis. The decline triggered over $683 million in forced liquidations across the crypto market in 24 hours, with long positions accounting for $556 million of those losses.

Long-Term Holders Fuel Selling Pressure

A significant factor amplifying the market pressure comes from long-term Bitcoin holders selling approximately 815,000 BTC over the past 30 days, the highest level since January 2024, according to CryptoQuant data. These seasoned investors, who typically hold Bitcoin through market cycles, have been taking profits as prices approached record highs, adding substantial sell-side pressure to an already weakening demand environment.

"Large outflows signal a risk-off reset, reflecting institutions pulling back amid macro noise," said Vincent Liu, chief investment officer at Kronos Research, in comments to The Block. "This flow weighs on short-term momentum but doesn't dent the broader structural demand. These bleed-outs align with oversold conditions, opening doors for long-term opportunists."

CryptoQuant's analysis reveals that long-term holders realized approximately $3 billion in profits on Nov. 7 alone, comparable to October's peak profit-taking levels. In October, these holders sold nearly 405,000 BTC valued at $43 billion, with whale addresses moving significant amounts to exchanges, including one address transferring 13,004 BTC.

The critical difference between current conditions and previous distribution phases is the absence of sufficient demand to absorb the supply. During earlier bull market periods, institutional buyers readily stepped in to purchase Bitcoin at higher prices. Now, with spot demand contracting and ETF inflows turning negative, the market struggles to maintain price levels above the psychologically important $100,000 mark.

Ethereum ETFs Also Face Heavy Redemptions

The selling pressure extended beyond Bitcoin, with U.S. spot Ethereum ETFs recording $259.77 million in outflows, marking the highest single-day withdrawal since Oct. 13. BlackRock's Ethereum fund accounted for $137.37 million of the outflows, while Grayscale's Ethereum Trust saw $67.91 million exit and its Mini Ethereum Trust recorded $35.82 million in redemptions.

The synchronized outflows across both Bitcoin and Ethereum products suggest a broader risk-off sentiment gripping cryptocurrency markets rather than concerns specific to individual assets. Min Jung, research associate at Presto Research, noted that the pattern "signals a broad de-risking across markets," with investors "pulling capital from higher-beta assets and rotating into safety, reflecting uncertainty around the Fed's path and deteriorating macro sentiment."

Market Dynamics and Historical Context

Despite the dramatic outflows, some analysts maintain perspective on the broader trajectory. Bloomberg ETF analyst James Seyffart has characterized such movements as "par for the course" for ETF categories, noting that billion-dollar swings are not unusual for traditional financial products managing significant assets.

James Butterfill, head of research at CoinShares, echoed this sentiment, pointing out that even $1 billion represents just a small fraction of the more than $100 billion now invested in Bitcoin ETFs. "It's actually quite small in the grand scheme of things," he told Fortune during the February outflow event. "So it's not particularly damaging."

Some of the selling pressure may stem from institutional investors unwinding basis trading strategies, which exploit price differences between spot and futures markets. According to VanEck's Matthew Sigel, profits from these trades "have recently collapsed, making it far less attractive," prompting hedge funds to close positions and trigger redemptions.

Final thoughts

The current market structure presents a complex picture for Bitcoin's immediate future. Bitcoin continues to hover around its 365-day moving average of $102,000, a critical technical and psychological support level that has served as ultimate support throughout the current bull cycle. A sustained break below this level could trigger deeper corrections.

However, not all investors view the current distribution as bearish. CryptoQuant suggests some market participants see this as "strategic redistribution typical of a bull market cycle", with coins moving from long-term holders into the hands of institutional investors and traditional finance platforms serving retail clients.

The coming weeks will test whether new buyers emerge to absorb the selling pressure from long-term holders and whether the $100,000 level can hold as support or will give way to further declines. With institutional demand currently falling below daily mining supply for the first time in seven months, the market faces a critical juncture in determining Bitcoin's trajectory heading into year-end.