Investors pulled $635 million from Bitcoin ETFs on October 22, before the price fell to the 7% threshold typically triggering heavy selling.
On October 22, $635.49 million was withdrawn from US spot Bitcoin (BTC) exchange-traded funds (ETFs). The withdrawals occurred while BTC had not yet fallen to the level that historically triggers heavy selling by ETF holders.
The day before, inflows into those funds totaled $528.40 million. DWF Labs' research identifies the specific price threshold, and BTC currently trades near that point.
According to SoSoValue, the October 22 outflow was the biggest single-day withdrawal since June 25. This halted a three-day streak of inflows totaling approximately $1.08 billion. That streak started with $526.6 million on October 19, marking the funds' strongest day since September 22. Net flows for October now show about $174.5 million in withdrawals.
Investors sold even though BTC traded above the level that new research associates with increased ETF selling. DWF Labs, a crypto market maker, analyzed spot Bitcoin ETF flows from January 2024 onward. The research determined that selling intensifies when BTC closes 7% below its 20-day high.
“ETF investors aren’t shaken by small dips, but once a fall reaches about 7%, they start selling,” the report read.
After such a drop, average daily flows shift from about $74 million in inflows to $72 million in outflows. In 19 of the 24 instances studied by DWF, flows deteriorated. Using Binance daily closes, BTC ended October 22 roughly 5.9% below its October 4 high of $86,530. This places the 7% threshold around $80,470. DWF also observed that ETF flows generally follow price movements. At 7 out of 8 market peaks, flows were still positive on the peak day. October's flows mirrored this pattern. Money came in as BTC rallied into October 21, and then left when the price dropped.
The price action echoed the flow data. BeInCrypto Markets reported BTC fell 3.41% in 24 hours to $81,297. Over the past week, ETF flows mirrored the price movement. Based on Binance daily closes, BTC rose from $82,245.93 on October 15 to $84,093.42 on October 21. The rally paused near $85,000. BTC closed at $81,416.09 on October 22, a 3.18% decline from the previous day's close.
The 7% threshold is also expected to shift. When the October 4 high falls outside the 20-day window, the next reference will be October 5's close of $85,766.87. That would reduce the trigger to roughly $79,760, unless BTC first closes above $85,766.87. DWF's data, however, indicates that such selling typically fades. Following past 7% declines, flows stayed near zero the next week and turned positive the week after. The firm noted that its sample shows a clear pattern but lacks statistical proof. The next few daily closes will indicate whether ETF outflows intensify if BTC closes below that level.
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Disclaimer: this article comes from third-party media and is provided for reference only. It does not constitute investment advice. Crypto and other financial products carry significant price volatility risk, so please make your own decisions carefully.
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