Trading volumes also dropped sharply thanks to weaker risk appetite as Bitcoin hovered near $91,000. Analysts believe that despite short-term selling, long-term fundamentals are still constructive, with exchange balances now at their lowest levels since 2017. At the same time, concerns are emerging about Bitcoin’s ability to replicate its strong start to 2025 in January of 2026. 21Shares’ Ophelia Snyder warned that fragile sentiment and macro uncertainty could limit upside.
Bitcoin ETFs See Sharp Outflows
US spot Bitcoin ETFs saw a sharp reversal in flows on Thursday after recording $194.6 million in net outflows. This was the largest daily pullback in two weeks as volatility continued to unsettle traders.
Data from Farside Investors shows BlackRock’s IBIT leading the decline with $112.9 million in outflows, followed by Fidelity’s FBTC at $54.2 million. Other major issuers, including VanEck’s HODL, Grayscale’s GBTC, and Bitwise’s BITB, also logged redemptions. The downturn came just one day after a smaller $14.9 million net outflow and is the biggest single-day withdrawal since Nov. 20.
Bitcoin ETF flows (Source: Farside Investors)
The pickup in outflows coincided with a drop in trading activity across the ETF suite. Total spot Bitcoin ETF volume fell to $3.1 billion on Thursday, down from $4.2 billion on Wednesday and $5.3 billion on Tuesday. This could be a sign that there is reduced risk appetite as Bitcoin’s price action is still quite choppy. Bitcoin slipped 2.4% over the past 24 hours to $91,227 after briefly plunging to the $84,000 range earlier in the week.
BTC’s price action over the past week (Source: CoinMarketCap)
Market analysts say the ETF weakness is being driven less by retail sentiment and more by the unwinding of sophisticated basis trades. According to Nick Ruck, director at LVRG Research, the recent compression of the futures-spot spread below breakeven forced arbitrage desks to exit positions, triggering selling pressure across both ETFs and underlying BTC holdings at a time of elevated volatility. Ruck added that traders are now laser-focused on upcoming US inflation reports and the Federal Reserve’s Dec. 10 meeting, where expectations of a 25-basis-point rate cut could help restore confidence if it signals a broader easing cycle.
Despite the outflows, some analysts argue that Bitcoin’s structural backdrop is still strong. Timothy Misir, head of research at BRN, said that exchange balances fell to around 1.8 million BTC, the lowest since 2017. He said the market “opened with quiet strength,” due to persistent accumulation, thinner exchange supply, and price stability above the True Market Mean. What the market needs now, he added, is a decisive breakout into the $96,000 to $106,000 range to reignite bullish momentum.
The cautious sentiment wasn’t limited to Bitcoin. Spot Ethereum ETFs also saw $41.6 million in net outflows on Thursday, reversing the $140.2 million in inflows that was recorded the previous day.
Bitcoin’s 2026 Outlook Clouds
Bitcoin may also struggle to repeat its strong early-2025 price gains as the market heads into 2026. This is according to 21Shares co-founder Ophelia Snyder.
In a recent interview, Snyder said the factors driving current volatility are unlikely to resolve quickly, making a similar January rally far from guaranteed. She pointed out that Bitcoin ETFs often see renewed inflows at the start of the year as investors rebalance portfolios, but added that this dynamic depends heavily on sentiment — something the market is currently lacking.
Ophelia Snyder
Bitcoin’s momentum shifted sharply after reaching a peak of $109,000 on Jan. 9, 2025, one day before Donald Trump’s inauguration. The asset climbed even more to an all-time high of $125,100 on Oct. 5, but the rally reversed after a massive $19 billion liquidation event on Oct. 10. That shock triggered a much more cautious outlook among traders who previously expected a stronger finish to the year.
Despite the near-term uncertainty, Snyder said that she is more optimistic about the long-term trajectory. She sees the current correction as a reaction to risk-off sentiment across financial markets rather than a crypto-specific issue, and suggested Bitcoin’s underlying fundamentals are still intact. She also pointed to several potential upside catalysts, including the expansion of crypto ETFs across major investment platforms, increased interest from governments exploring digital assets, and rising demand for alternative stores of value beyond gold.
Still, Snyder warned that macro conditions could also drive Bitcoin lower. Persistent risk-off behavior in global markets or continued strength in gold could weigh on demand from traditional investors. Not everyone shares the tempered outlook. BitMine chair Tom Lee recently reiterated his view that Bitcoin will hit a new all-time high before the end of January 2026.
Bitcoin monthly returns (Source: CoinGlass)
Historically, the month has been favorable for the asset. In fact, since 2013, Bitcoin averaged a 3.81% return in January, according to data from CoinGlass.
