US Bitcoin ETFs Face Three-Day Outflow Streak as Risk Appetite Cooldown Resumes

Bitcoin (BTC) is trading around $90,000 as U.S. spot ETFs see outflows for the first time in several weeks. Investors appear to be taking profits after a strong start to 2026, with Bitcoin ETFs recording $486 million in outflows on Wednesday. This follows three consecutive days of inflows totaling over $1.1 billion at the start of the year.

The outflows are the largest single-day withdrawals since mid-November, according to Farside Investors data. Fidelity's FBTC led the redemptions with nearly $248 million, while BlackRock's IBIT saw almost $130 million in outflows. The broader market remains cautious as uncertainty lingers around macroeconomic conditions and geopolitical events.

Ethereum and XRP ETFs also experienced outflows, though Ethereum saw inflows for three consecutive days before Wednesday's pullback. XRP ETFs posted their first outflow since their November debut, signaling a potential shift in institutional sentiment. The cumulative net inflow for Ethereum ETFs now stands at $12.69 billion, while XRP ETFs have attracted $1.2 billion.

Why Did This Happen?

Bitcoin's outflow trend is linked to broader macroeconomic uncertainty and profit-taking by institutional investors. After a strong opening to the year, many investors are reassessing their exposure to risk assets. The U.S. military operation in Venezuela and broader geopolitical volatility have raised concerns about long-term stability, prompting some to reduce positions in high-beta assets like Bitcoin.

The Trump administration's aggressive foreign policy stance has also contributed to investor caution. The capture of Venezuelan President Maduro has shifted focus to potential risks in Latin America and the energy sector. While Bitcoin held up relatively well during the initial shock, the market has since retreated amid profit-taking and a lack of clear macro catalysts.

How Did Markets Respond?

Bitcoin's price action reflects the outflows, with BTC trading in a choppy range around $90,000. The Relative Strength Index (RSI) has dipped to the midline on the daily chart, indicating weakened bullish momentum. Technical indicators suggest that the market is testing key support levels ahead of a potential breakout or further consolidation.

Ethereum and other major altcoins have also seen similar patterns. ETH is trading near $3,200, having recorded inflows earlier in the week before Wednesday's outflow. XRP has pushed to around $2.13 but faces pressure as investors reassess exposure to alternative cryptos.

BlackRock's IBIT remains the largest Bitcoin ETF, but its recent outflows highlight growing uncertainty among institutional allocators. The fund's performance is closely watched as a barometer for broader market sentiment. Other ETFs also saw outflows, reinforcing a shift in positioning.

What Are Analysts Watching Next?

Market analysts are now focused on whether the outflows will continue or reverse in the coming days. On-chain data suggests that long-term holders are realizing losses at an increasing pace, indicating growing fatigue in the market. This divergence between ETF inflows and on-chain behavior raises questions about the sustainability of the current price levels.

Derivatives positioning and options markets also provide insight into investor sentiment. Put skew has compressed, and interest in longer-dated upside exposure is rising. This suggests that traders are not aggressively hedging against downside risk but are willing to hold positions for potential upside in 2026.

The broader market is also keeping a close eye on incoming macroeconomic data and geopolitical developments. Bitcoin ETFs have historically responded to both macro shocks and regulatory clarity. If the U.S. dollar stabilizes or the Federal Reserve signals an easing path, Bitcoin could see renewed institutional demand.

BlackRock's continued dominance in ETF flows is a key variable for the market. The firm's recent inflows at the start of 2026 showed strong institutional appetite, but the recent outflows suggest that some investors are reassessing their exposure. Any further shifts in IBIT's performance will be closely watched as a signal for broader market sentiment.

Investors are also monitoring the potential impact of new ETF launches, particularly for Ethereum and Solana. Morgan Stanley's recent filing for Bitcoin and Solana ETFs has added to the institutional interest in digital assets. However, the success of these products will depend on how well they align with current market conditions and investor risk appetite.