BTC/USD faces renewed downside risks as ETF outflows weigh on demand

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Bitcoin tests support amid institutional outflows

Institutional demand weakens amid heavy ETF redemptions

Pressure on the cryptocurrency is being driven by unstable institutional demand through U.S. spot Bitcoin ETFs. After net inflows of $526.7 million on October 19 and $524.8 million on October 21, the funds recorded outflows of approximately $635.6 million on October 22, the largest since late June. The bulk of redemptions came from BlackRock's IBIT, which lost $254.1 million, Fidelity's FBTC with outflows of $217.5 million, and ARKB, from which investors withdrew $109.4 million.

At the same time, from October 1 to October 22, the cumulative net ETF flow remained negative at approximately $175 million, despite substantial capital inflows during individual trading sessions. This trend indicates that institutional investors are not yet ready to consistently increase their positions as prices decline. The release of final data for October 23 will provide a clearer picture of whether the redemption trend intensified ahead of the Fed meeting.

Fed policy outlook keeps risk appetite subdued

The Fed's monetary policy remains the main macroeconomic factor. Following September's rate increase to 3.75–4.00%, market participants largely expect the Fed to maintain the current range at its October 28 meeting.

For Bitcoin, comments regarding further monetary tightening and the outlook for U.S. Treasury yields will be particularly important. Elevated real interest rates increase the attractiveness of dollar-denominated assets and the cost of financing leveraged positions, limiting demand for cryptocurrencies. Even an unchanged interest rate could prove to be a negative signal if the central bank confirms its readiness for additional tightening before the end of the year.

In the eurozone, economic data also point to deteriorating conditions for risk assets. For the global cryptocurrency market, this situation is important primarily through the currency channel and liquidity expectations. At its October 29 meeting, the ECB is widely expected to keep the deposit rate unchanged at 2.50%, as inflation risks limit the scope for monetary easing despite weaker economic growth.

If the divergence between Europe's economic outlook and the Fed's more hawkish stance strengthens the dollar, Bitcoin could face additional pressure. Conversely, more dovish signals from the U.S. central bank could improve investor sentiment even if European economic data remain relatively weak.

$80,000 support faces another critical test

At this stage, bulls continue to defend the $80,000–79,200 support area, but attempts to rise are currently limited by resistance around $80,400, which maintains the risk of another break below $80,000 and a renewed test of $79,200. A break above resistance, as stated in BTC/USD faces renewed downside risks despite bullish on-chain signals, would lead to a rise toward $81,000–81,600.

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