$11,000 Deficit: Why Record $8.9B Bitcoin ETF Drawdown Is Dampening Wall Street’s BTC Appetite
Bitcoin is showing temporary signs of relief after retrieving the $70,000 level. The move kept selling pressure following weeks of volatile trading. The recovery comes as markets continue to react to heightened uncertainty and political tension. This has kept liquidity tight and investor sentiment cautious. While a push above $70K offers a short-term boost, fundamental data suggests that a large portion of market participants remain under pressure.
According to a recent report by CryptoQuant, holders of Bitcoin ETFs – which broadly reflect institutional and retail demand for managed investment vehicles – are currently undervalued. Calculated at around $79,000, this cost basis leaves the average ETF investor holding a loss despite the recent rebound.
Treat this metric as a reference point, not as an accurate measure of individual investor behavior. ETF flows can obscure internal reallocations among participants, and the ratio cannot capture everything that exists within the fund. Still, it provides a useful measure of the compounded rate of return for an ETF.
ETF Exits Ease After Record $8.9B Drawdown as Bitcoin Attempts to Stabilize
Darkfost’s analysis highlights the scale of recent stress across Bitcoin ETFs. With Bitcoin trading below the $70,000 threshold during most of the correction, these currencies have recorded their biggest decline since their all-time high in terms of value invested. In dollar terms, more than $8.9 billion exited the ETF ecosystem as investors reduced exposure during the downturn.
The pressure was especially noticeable on the biggest product on the market. BlackRock’s iShares Bitcoin Trust (IBIT), which once held more than 806,000 BTC, experienced a major withdrawal during the correction. According to the data, more than 42,000 BTC have left the fund, showing a clear wave of distribution as the market slows down and price momentum weakens.
These exits represent an important source of selling pressure during the downturn, reinforcing many weaknesses in all existing markets. When large ETFs experience withdrawals, they often need to use Bitcoin to meet the redemptions, which increases supply in the market.
However, recent data suggest that the situation may stabilize. The cumulative decline in ETF funds has improved from about $8.9 billion to about $7.8 billion from the peak. Although still negative, this change indicates that the pace of outflows is slowing.
A renewed wave of demand from ETF investors is likely to help Bitcoin establish a solid foundation going forward.
Bitcoin Gets To $70K As A Short-Term Boost
On the 4-hour chart, Bitcoin is showing temporary recovery momentum after pushing above the $70,000 level. The price was able to retrace the 50-period moving average (blue) and is now testing the 100-period moving average (green), indicating short-term strength development after weeks of lower highs.
The recent move of more than $70K represents a significant change of mind. In late February, the $69,000–$70,000 region served as a consistent dumping ground where traders repeated efforts to look higher. Recent exits suggest that buyers are starting to absorb that supply, at least in the short term.
However, the broader framework remains cautious. Bitcoin is still trading below the 200-period moving average (red), currently positioned near the $70K mid-range. This level continues to represent important resistance that may need to be re-found to ensure a strong trend reversal.
Volume increased modestly during the exit attempt, indicating renewed participation, although not yet at levels typically associated with sustained bullish expansion.
From a technical point of view, holding above $69,000 will be important to maintain momentum. If this level turns to support, BTC can try to go to the region of $73,000–75,000. On the other hand, a failure to hold above $69K could push the price back into a broader consolidation range around $66,000–$67,000.
Featured image from ChatGPT, chart from TradingView.com
