Crypto selloff deepens as institutional outflows meet heavy liquidations

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Institutional demand weakens as leverage unwinds

Spot Bitcoin ETFs record $228.5 million in weekly outflows

Institutional demand for Bitcoin through U.S. spot ETFs continues to soften. According to SoSoValue, the funds recorded $228.5 million in net outflows over the trading week from October 12 to October 16. The biggest withdrawal came on October 14, when investors pulled roughly $261.4 million, more than offsetting the previous session’s $175.7 million inflow.

Outflows were smaller than the week before, when Bitcoin ETFs lost $681.1 million. Even so, the continued negative balance suggests ETF demand is still not strong enough to support a sustained return of institutional capital.

Ethereum ETF withdrawals reach $320 million as ETHA leads losses

The picture for Ethereum ETFs looks even weaker. SoSoValue data showed roughly $320.1 million in net outflows over the same period, exceeding the losses recorded by Bitcoin funds. Combined withdrawals from the two largest crypto ETF categories therefore reached approximately $548.6 million over five trading days.

Most of the pressure came from BlackRock’s iShares Ethereum Trust (ETHA), which saw roughly $299 million withdrawn. That accounted for more than 90% of total net outflows from Ethereum ETFs, highlighting how concentrated the selling was in the segment’s largest product.

Persistently negative flows from both Bitcoin and Ethereum ETFs suggest the cooling of institutional interest via ETFs, but they do not necessarily mean that institutions are pulling out of the cryptocurrency market completely.

Nearly $3 billion in liquidations amplify market selling pressure

Leverage unwinds have added yet another source of pressure. According to estimates made by CoinGlass’s liquidation graph for the past seven days, liquidations amounted to about $3 billion, of which $2.3 billion were longs, while $700 million were shorts.

The sharpest spike came on October 15, when liquidations were about $488 million in one hour, mostly due to long positions. Such forced selling could make an already vulnerable market more fragile and cause even more rounds of liquidation.

Inflation fears add to crypto market selling pressure

Macroeconomic conditions are compounding the pressure from weaker institutional flows and leveraged liquidations. As Traders Union notes, accelerating U.S. inflation has revived concerns that the Federal Reserve may need to keep monetary policy tighter for longer.

The prospect of persistently high interest rates reduces the appeal of higher-risk assets, including Bitcoin.

Crypto is therefore dealing with several headwinds at once: softer institutional inflows, a large-scale reduction in leveraged positioning and continued uncertainty around interest rates. Under those conditions, even sharp short-term rebounds may struggle to hold until demand improves and the pace of forced liquidations begins to ease.

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