Why bitcoin is dropping as BlackRock’s ETF sees massive outflows

Bitcoin is once again on the back foot. After a sharp pullback, fresh data from US spot bitcoin ETFs shows heavy outflows, with BlackRock’s IBIT product leading the selling. This wave of redemptions is adding extra sell pressure to a market that was already showing signs of weakness.

ETF outflows: why BlackRock is selling bitcoin

Over the past week, US spot bitcoin ETFs have seen significantly more money leaving than entering. Each trading day tells the story:

• Monday: around $400 million in net outflows across ETFs
• Tuesday: about $115 million in net outflows
• Wednesday: a brief pause with roughly $74 million in net inflows
• Thursday: more than $430 million in net outflows
• Friday: over $411 million in net outflows

The most notable part of this trend is how much of it is coming from BlackRock’s IBIT ETF. Across the week, IBIT recorded large single-day outflows, including roughly $403 million on Friday alone.

It’s important to understand what this actually means. BlackRock is not dumping its own bitcoin holdings for fun. These are investors redeeming their ETF shares. Because spot ETFs are backed by real BTC, when investors sell ETF shares in size, the fund must sell an equivalent amount of bitcoin to meet those redemptions. That’s where the extra sell pressure comes from.

Combined with weakness in the broader US stock market, these ETF outflows have likely been a key factor behind the recent bitcoin drop. For a deeper dive into how institutional flows and big players like BlackRock and MicroStrategy affect BTC over time, see this detailed breakdown of BlackRock’s bitcoin selling and MicroStrategy’s strategy.

Short-term vs long-term bitcoin trend

Despite the recent volatility, the bigger picture for bitcoin still looks different from the short-term pain.

On the weekly chart, a long-term bullish divergence is still intact. This kind of signal previously appeared near the end of the 2022 bear market, before a multi-year uptrend. That doesn’t guarantee the same outcome this time, but it does suggest that, structurally, the macro trend can remain bullish even while price chops lower for weeks or months.

In other words, bitcoin can stay in a long-term uptrend while going through a mid-term “cool-off” phase. That’s what seems to be happening now: the long-term structure is still constructive, but the short to mid-term trend is clearly weak.

Key bitcoin levels and liquidation targets

On higher timeframes, bitcoin is currently testing a major support area in the mid-$70,000s.

• Primary support zone: roughly $74,000–$76,000, with a strong cluster around $75,000
• This level was flagged as a likely support area even before BTC broke below $80,000, and so far it has indeed acted as a floor.

However, traders should not confuse “holding support” with a full bullish reversal. The market can bounce slightly or move sideways at support without shifting the overall short-term trend.

Bearish divergence still in play

On the 3-day and daily charts, bitcoin is still working through a clear bearish divergence: price made higher highs while momentum indicators (like RSI) made lower highs. This usually signals fading buying strength and often leads to a period of weakness or consolidation.

This divergence has been building and playing out for over a month, and it remains active. As long as it does, strong bullish momentum is unlikely. Brief bounces and short-term relief rallies can happen, but the broader bias for the coming weeks still leans bearish or at least weak.

Liquidation heat map: where the next big move could go

Looking at the bitcoin liquidation heat map over the last month, a lot of liquidity is sitting below the current price, which can act like a magnet if support fails:

• Minor liquidity: around $74,300–$74,400 (near recent local lows)
• Major liquidity cluster: starting near $67,000
• Strongest zone: roughly $65,000–$67,000

If bitcoin breaks convincingly below the $74,000–$76,000 support zone, that $65,000–$67,000 region becomes the next big downside target. It lines up with previous support and resistance levels and is loaded with liquidation liquidity, making it a logical area for price to seek out.

In the very short term, there are signs of a small bullish divergence on the 6-hour chart, which could slow the pullback or trigger a modest bounce. But until the larger daily and 3-day signals flip, any such move is more likely to be a temporary relief rather than the start of a strong new uptrend.

What this means for traders right now

The current environment is best described as a short to mid-term downtrend within a long-term uptrend. That has a few practical implications:

• Short-term leverage traders: the path of least resistance has been to the downside. Short setups have generally been more forgiving than trying to long every small dip.
• Long-term investors: if you’re dollar-cost averaging for a multi-year horizon, this kind of cool-off phase can offer better entry prices, but timing exact bottoms is always difficult.

None of this is financial advice, but the key is to respect the trend you’re trading. Trying to fight a short-term bearish trend with aggressive leveraged longs is usually a costly strategy.

Bitcoin dominance and what it says about altcoins

Bitcoin dominance on the 3-day chart is currently testing a major resistance zone around 60.5%–61%. It’s struggling to break above, but it also hasn’t been sharply rejected yet.

As long as dominance chops around this resistance without a clear breakout or breakdown, the message is that, on average, altcoins are likely to move broadly in line with bitcoin. If BTC is weak, many alts will also be weak. If BTC sees a brief relief bounce, altcoins may get similar, but not necessarily stronger, relief.

Ethereum: same story, sharper moves

Ethereum is showing a very similar structure to bitcoin on the daily chart: a clear bearish divergence that has been playing out for over a month, followed by ongoing weakness and lack of strong bullish momentum.

ETH also failed a breakout attempt, confirming that buyers were running out of steam. Since then, it has been in a cool-off phase, with the same basic rule: don’t be fooled by short-term bounces into thinking the broader trend has flipped back to bullish just yet.

If you want a deeper breakdown of why ETH has often been dropping faster than BTC recently, and what’s driving that underperformance, check out this analysis of why Ethereum is crashing harder than bitcoin.

XRP: more downside as support levels get tested

XRP is also in a clear short-term bearish phase. The daily chart shows a strong bearish divergence that has been playing out for weeks, and price has been steadily moving lower.

Key XRP levels to watch:

• Current support: around $1.15–$1.16, where previous resistance has flipped into support
• Below that: minor support near $1.11, and another area around $1.08
• More important support: closer to $0.15 and especially around $0.13 (on the larger structure)

As long as the bearish divergence remains active, the bias is for continued weakness or grinding downside, interrupted by occasional short-lived bounces.

Solana: clean rejection from resistance

Solana is following the same script. On the daily chart, SOL printed a bearish divergence and then rejected almost perfectly from a key resistance zone between $96 and $99.

Important SOL levels:

• Near-term support: around $87–$88
• Next significant support: roughly $81.50–$83

While the divergence is still playing out, the odds favor further weakness or sideways-to-down price action rather than a strong, sustained rally.

Chainlink: resistance holds, downside still in play

Chainlink (LINK) on the 3-day chart is also working through a bearish divergence. The token has repeatedly failed to break above a major resistance area between $11.80 and $12.30.

Key LINK zones:

• Resistance: $11.80–$12.30
• Current support: around $10.60–$10.80
• Next major support: just under $10, around $9.80–$10.00

Until momentum flips and price can reclaim and hold above resistance, the more realistic expectation is continued weakness, with occasional short-term relief rallies.

How to approach the market in a cool-off phase

Even in a weak market, there are ways to position yourself thoughtfully:

• Active traders: Short setups and trend-following strategies typically perform better in a downtrend than bottom-picking. Managing risk is crucial, especially with leverage.
• Longer-term holders: Patience is a strategy. Waiting for the cool-off phase to mature and then accumulating quality assets on spot at lower prices can be a way to use bearish conditions to your advantage.

The main takeaway is that the market is currently in a short to mid-term corrective phase, driven partly by ETF outflows and fading momentum after a strong run-up. The long-term bitcoin structure hasn’t broken, but the path there will likely involve more volatility, more tests of support, and possibly deeper dips if key levels like the mid-$70,000s fail.

Staying aware of ETF flows, key support zones, and the broader trend can help you avoid emotional decisions and trade or invest with a clearer plan.