Bitcoin Plunges Below $70K: $2.56B in Liquidations and $545M ETF Outflows

Bitcoin plunged below the $70,000 mark on Thursday, hitting a low of $69,055.46. This is the first time the asset has breached that level since November 2024, marking its weakest point in about 15 months. The drop extended a prolonged downturn, with Bitcoin shedding over 44% from its peak last October.

The selloff was amplified by a massive wave of forced selling. Data shows $2.56 billion in Bitcoin positions were liquidated in recent days as the price fell. This mechanism, where leveraged trades are automatically closed when prices hit certain levels, added significant downward momentum and exacerbated the decline. The liquidation pressure was part of a broader market retreat from risk assets.

This forced selling coincided with a sharp reversal in institutional flows. On the same day, spot Bitcoin ETFs recorded $545 million in outflows. While the year-to-date net position remains negative at $1.8 billion, the daily outflow adds to the selling pressure. The confluence of these three forces-macro-driven risk-off sentiment, a cascade of liquidations, and ETF outflows-created a powerful downward spiral.

The Flow Impact: ETF Resilience vs. Capital Flight

The daily $545 million ETF outflow is a stark signal, but the total assets figure shows remarkable resilience. With total assets under management standing at $93.5 billion, the recent selling represents a relatively small fraction of the overall pool. Analysts note that only around 6% of total assets have exited the funds despite the sharp price drop. This suggests most institutional investors are holding firm, a key buffer against a deeper capital flight.

Looking at the longer trend, the daily outflow fits a larger pattern. Year-to-date, the funds have attracted $3.5 billion in inflows but seen $5.4 billion in redemptions, leaving them net negative by $1.8 billion. This shift from a net positive to a net negative position over the year highlights a significant change in investor sentiment, even if the total AUM remains robust. The daily outflow is a symptom of this broader trend.

This capital flight mirrors the broader market's severe weakness. The ETF outflows coincide with total cryptocurrency market capitalization down around 20% year-to-date. The drop from about $3 trillion to $2.5 trillion shows the selling pressure is systemic. While the ETFs' $93.5 billion base provides stability, the trend of redemptions indicates that even the most established crypto products are feeling the strain of the market's retreat.

Catalysts and Scenarios: What to Watch Next

The immediate price level to watch is the broken psychological barrier at $70,000. With Bitcoin trading below that level for the first time since November 2024, the focus shifts to whether it can find support. Analysts warn that a failure to hold this level makes a move toward the $60,000 to $65,000 range quite likely. The current setup is a classic test of support, where a break below could trigger further automated selling.

The key flow metric to monitor is the reversal in ETF flows. The recent $545 million in daily outflows is a clear bearish signal. A sustained shift back to net inflows would be a primary catalyst for a price floor, indicating institutional investors are buying the dip. For now, the trend of redemptions, which has left funds net negative by $1.8 billion year-to-date, remains a headwind.

Liquidation levels will signal whether the forced selling is burning out. The $2.56 billion in Bitcoin positions liquidated in recent days created a major feedback loop. As the price falls, liquidations force more selling, which pushes the price lower. Monitoring these levels for a decline will show if the most vulnerable leveraged longs have been cleared, potentially reducing the downward momentum.