US Crypto ETFs Face Deleveraging Pressure as Institutional Sentiment Sours on Monday

U.S. spot Bitcoin and Ethereum ETFs faced deleveraging pressure as institutional sentiment turned sour on Monday. Over $800 million in leveraged positions were liquidated across crypto markets in the past 24 hours, with 90.5% of these being long positions. The largest liquidation occurred on Hyperliquid, where a $25.83 million BTCUSDT position was wiped out.

Risk-off sentiment intensified as EU capitals considered imposing tariffs on the U.S. in response to President Trump’s threats. These trade tensions triggered a wave of liquidations, wiping out significant portions of leveraged positions.

Bitcoin ETFs saw a sharp outflow of $395 million on Monday, while Ethereum ETFs continued to attract inflows for the fifth consecutive day. This contrast highlights the varied response of different crypto assets to geopolitical tensions and institutional rebalancing.

Why Did This Happen?

The outflows in Bitcoin ETFs came after three strong days of heavy buying, indicating that investors used the recent price jump to lock in profits. This move reflects short-term profit booking rather than panic selling. The EU–US trade tensions also played a key role, as President Trump announced new tariffs on European nations opposing his Greenland plans.

Ethereum ETFs, on the other hand, have seen a steady flow of capital. The total inflow for the week reached $479 million, signaling institutional confidence in the asset class. This trend is attributed to Ethereum’s role in DeFi, NFTs, and tokenization, with many institutions viewing ETH as a long-term growth asset.

How Did Markets React?

The fear and greed index dropped to 44 on Monday, signaling a shift from optimism to caution. Bitcoin fell below $93,000, while Ethereum and other major altcoins followed suit. This dip was driven by the risk-off environment and geopolitical uncertainty, as markets reacted to potential trade-war escalation.

Institutional investors are rotating capital among different assets, with some sectors seeing inflows while others face outflows. XRP ETFs recorded a $17 million inflow, pushing total assets under management to $1.51 billion. This reflects growing institutional confidence in XRP as a cross-border payment solution.

What Are Analysts Watching Next?

Analysts are closely monitoring the sustainability of ETF inflows and how they impact market structure. Vincent Liu of Kronos Research noted that reduced whale selling and tightening supply could lead to more institutional buying, but the shift is still in its early phase.

The cumulative inflows into Bitcoin ETFs remain positive, though recent outflows may indicate short-term profit-taking. Experts suggest that multiple consecutive weeks of strong demand are needed to drive a lasting uptrend.

XRP ETFs are another focal point, with their inflows showing a shift toward long-term allocation rather than speculative trading. Analysts expect this trend to continue if institutional confidence in the asset class remains strong.

Bitcoin’s ETF outflows are being seen as a normal part of the market cycle rather than a bearish signal. Institutional players are rebalancing after strong runs, and the overall ETF demand remains robust.