ETF withdrawals accelerate Bitcoin’s decline as on-chain data shows whale panic

Bitcoin ETF funds are experiencing significant capital outflows in recent trading sessions. According to reports from Farside Investors, withdrawals reached (millions in the current week, with BlackRock iShares Bitcoin Trust )IBIT$188 leading the withdrawals with $157.3 million and approximately 1,792 Bitcoins leaving the fund. This institutional divestment scenario coincides with BTC trading around $93,060 (down 2.10% in 24 hours), well below the recent highs that the market was expecting to consolidate.

The contraction of whales and sharks as a sign of structural weakness

On-chain data provided by the specialized firm Santiment reveal a concerning shift in the distribution of holdings. The total number of wallet addresses holding at least one Bitcoin has contracted by 2.2% since reaching its annual peak on March 3. This movement reflects a pattern similar to what was observed in previous bull cycles, when small accumulators began to capitulate under bearish pressure.

However, there is an interesting nuance in this story. Wallets controlling more than one Bitcoin have collectively increased their positions by approximately 136,670 BTC during the same period. This divergence suggests strategic accumulation by institutional whales while medium-sized sharks are abandoning positions, a phenomenon that historically precedes significant volatile movements.

Echoes of the 2021 cycle: Is history repeating?

Crypto market analyst Tracer has identified alarming parallels between the current price structure and the scenario that unfolded in 2021. According to his technical analysis, Bitcoin appears to be forming a double top pattern followed by cascading sales, with temporary rebounds before new declines. The projection suggests that a temporary rebound could push BTC to $100,000, but if the historical pattern plays out, a subsequent collapse would be inevitable, potentially driving the price below $60,000.

This scenario aligns with the thesis of some analysts warning about the market’s lack of preparedness. Extreme volatility and erratic movements in recent weeks indicate that every recovery attempt faces an almost immediate wall of selling pressure. Bitcoin has also shown a disconcerting negative correlation with assets that traditionally should be rallying: US tech stocks and metals like gold and silver.

The liquidity dilemma in a suffocated market

The combination of massive ETF outflows, contraction of smaller wallet addresses, and unexpected negative correlations paints a picture of compromised liquidity. Bitcoin’s market currently faces a fundamental challenge: the institutional flows that drove the previous cycle seem to be reversing.

With a market capitalization of $1.859 trillion and a 24-hour volume of $844.09 million, absolute liquidity remains robust, but flow patterns suggest redistribution rather than net accumulation. This is the true indicator that traders should monitor: not the momentary price, but where institutional capital is heading in upcoming cycles.