BlackRock Withdraws Bitcoin as BTC Slips to $95K Sparking Sell Fears

BlackRock, the world's largest asset manager, has withdrawn a large amount of Bitcoin from Coinbase Prime. This move came shortly after Bitcoin fell to $95,000, triggering speculation about a potential sell-off. Blockchain data indicates multiple transfers occurred over the past few days, with some analysts suggesting these are internal custody adjustments. Others, however, remain wary due to the timing and previous similar movements before major market events.

Bitcoin ETFs saw mixed activity recently, with outflows of around $394 million at the close of trading. BlackRock’s IBIT ETF, however, showed a positive net inflow of about $15 million, suggesting continued institutional interest in Bitcoin despite the pullback. The firm also increased its BTC holdings by 6,647 tokens, bringing its total to nearly 4% of the total Bitcoin supply.

BlackRock’s recent actions follow a broader pattern of inflows and outflows in the Bitcoin ETF space. Over the last three days, spot Bitcoin ETFs recorded over $1.7 billion in inflows, reversing earlier January outflows. BlackRock led the inflows, contributing $648 million to its IBIT ETF. This trend reversed as of January 15, with ETF inflows slowing significantly.

Why the Move Happened

BlackRock's withdrawals from Coinbase have sparked debate about whether they are routine custody transfers or signals of a potential sell-off. Some sources indicate the firm moves Bitcoin between wallets or custodians, possibly to support ETF creation or redemption processes. Others note that similar movements preceded key market events, including options expiries.

The timing of these withdrawals coincides with a broader decline in Bitcoin’s price. BTC fell from a two-month high above $97,000 to $95,000, raising concerns about short-term selling pressure. The market reaction has been cautious, with investors monitoring BlackRock's activity for further clues.

How Markets Responded

The recent drop in Bitcoin’s price has been exacerbated by regulatory uncertainty. A key U.S. crypto bill faced delays after Coinbase CEO Brian Armstrong criticized its wording. This delay led to a cancellation of Senate Banking Committee discussions and added pressure to an already cautious market.

Gold and silver also saw losses, with gold falling nearly 1% and silver dropping about 5%. This broader risk-off behavior highlights investor uncertainty across multiple asset classes. Meanwhile, Bitcoin ETF inflows remain a key indicator of institutional demand, with BlackRock’s IBIT ETF still showing resilience amid the market pullback.

What Analysts Are Watching

Analysts are closely watching the broader implications of BlackRock’s actions and ETF flows. While some suggest that the firm’s recent BTC additions indicate continued confidence, others note the mixed signals from ETF activity.

The regulatory environment remains a key factor. A recent analysis by Fidelity's Jurrien Timmer suggests that Bitcoin could face a "do-or-die" moment if it fails to retest the $65,000 level. This comes as the White House has threatened to withdraw support for the CLARITY Act if Coinbase does not return to negotiations.

In the short term, Bitcoin’s ability to hold the $95,000 support level will be crucial. A breakout from an ascending triangle pattern on the daily chart suggests a potential for further upside, though the recent volatility underscores the need for caution. Traders and analysts continue to monitor ETF activity and regulatory developments for the next potential market catalyst.