Nearly $1.2 billion flowed out in two days. Why are institutions suddenly "running away," and can Bitcoin hold its support?

The most significant institutional de-risking signal since the beginning of 2026 has arrived. On January 21, the combined net outflow of US spot Bitcoin ETFs and Ethereum ETFs reached $713 million, marking the second consecutive day of substantial selling. The day before (January 20), BTC ETF outflows approached $400 million, totaling nearly $1.2 billion over two days. During this sell-off, BTC dropped from a high near $97,000 a week ago to below $89,000, while ETH also retreated below $3,000. The market is asking: Is this a temporary correction or the beginning of a trend reversal?

Institutional Fund Flows Reverse Sharply

Tuesday’s data is particularly striking. Bitcoin-related funds saw a total outflow of $483 million, with multiple products under pressure. Ethereum ETFs experienced outflows of $230 million, ending a five-day streak of capital inflows. Notably, products managed by large asset management firms showed significant reductions in holdings, directly weakening the buy support in the spot market.

Capital allocation is also becoming more differentiated. On the same trading day, XRP-related ETFs saw net outflows exceeding $50 million, while Solana-related products recorded approximately $3 million in net inflows. This indicates that institutions are conducting more precise risk reassessment and asset reallocation.

Macroeconomic Pressure Continues to Ferment

Why are institutions withdrawing heavily in just two days? According to the latest news, macroeconomic and geopolitical uncertainties are the direct triggers. Trade tensions between the US and EU over Greenland remain unresolved, and volatility in global bond markets has increased. Japanese investors’ sell-off of government bonds is believed to have weakened overall liquidity, with this cross-market pressure further transmitting to equities and crypto assets.

Analysts point out that macro-driven de-risking often amplifies downside in risk assets in the short term. When traditional financial markets show signs of liquidity tightening, crypto assets—being high-beta assets—are among the first to be affected.

But is this really a trend reversal?

It’s important to view the data with a calm perspective. According to the latest analysis from Glassnode, Bitcoin’s retreat from recent highs reflects waning momentum rather than a worsening trend. Key indicators show BTC is in a consolidation phase rather than a deteriorating trend: the Relative Strength Index (RSI) has pulled back but remains above neutral, indicating a sideways market. Spot trading volume has modestly increased, with selling pressure noticeably easing.

More importantly, from an institutional perspective, despite the outflows over the past two days, the total net inflow into US spot Bitcoin ETFs remains at $57.82 billion. This suggests that institutional long-term interest in Bitcoin has not fundamentally changed, and the current sell-off may be more about risk management amid volatility.

Market Sentiment Is Clearly Divergent

There are differing views on the nature of this correction. Some believe it is more of a phase adjustment rather than a trend reversal. Analysts note that although Trump’s tariff remarks initially impacted the market, historical experience shows that such positions tend to ease under market pressure. Others suggest that the current capital outflows are more reflective of temporary de-leveraging driven by geopolitical factors, and that institutional views on the long-term value of crypto assets remain unchanged.

The Importance of Key Support Levels

From a price perspective, $89,000 is now a critical psychological level. If this support holds, combined with the fact that institutional net inflows remain positive, the market could enter a new consolidation phase. Conversely, if this level is broken, it may trigger further technical sell-offs.

Relevant information to watch includes Federal Reserve policy signals, progress in US-EU trade negotiations, and subsequent changes in Bitcoin ETF fund flows. These factors will directly influence market risk appetite.

Summary

The nearly $1.2 billion outflow over two days is indeed a clear de-risking signal, reflecting institutional caution amid increasing macro uncertainties. However, on a broader time scale, this may be part of a structural market adjustment rather than the start of a trend reversal. The key is to observe whether macro conditions further deteriorate and whether institutional funds re-enter the market. Currently, the market is at a sensitive equilibrium point, requiring close attention to ETF fund flows, Federal Reserve policy signals, and geopolitical developments.