Core Insights - US Spot Bitcoin and Ethereum ETFs are experiencing significant outflows as investors shift capital towards international equities, with only two weeks of positive inflows recorded in 2026 [1][2] - Total assets in US Bitcoin ETFs have decreased from approximately $115 billion to around $83 billion, while Ethereum ETFs have seen a decline from about $18 billion to near $11 billion, indicating a clear trend of capital leaving the crypto asset class [2] - International equity ETFs have recorded their strongest inflows in years, with January seeing record allocations into global ex-US funds, which absorbed roughly one-third of total ETF inflows [3] Market Dynamics - The increase in US Treasury yields, driven by stronger jobs data, has made bonds more attractive compared to risk assets like Bitcoin and Ethereum, contributing to a structural headwind for these cryptocurrencies [4] - The shift in capital from crowded US growth trades, including crypto, to cheaper overseas markets is indicative of a major rotation among institutional investors [3] - The current outflows from crypto ETFs are reversing the previous demand dynamics, where ETFs acted as a source of demand, now functioning as distribution channels [7] Future Outlook - While the long-term thesis for cryptocurrencies remains intact, the short-term liquidity environment is weakened due to ongoing ETF outflows [8] - Continued capital rotation and challenging macro conditions may persist, potentially exerting further pressure on Bitcoin, Ethereum, and the broader crypto market [9]

Prediction market participants on Polymarket are assigning a 71% probability that Bitcoin will drop below $65,000 in 2026, as the crypto traded around $75,000 following a weekend sell-off that pushed it to nine-month lows. The bearish sentiment reflects a convergence of technical indicators, underwater ETF positions, and analyst warnings that the market has entered a sustained downturn rather than a temporary correction. Multiple analysts now point to support zones between $62,000 and $65,000 as critica ...

Core Insights - Bitcoin price experienced a decline of over 3%, dropping to $112,000 after briefly reaching $116,000, which was unexpected given positive geopolitical news and strong performance in traditional markets [1][2][3] - The Nasdaq 100 Index rose by 0.6% and the S&P 500 Index surged 1.23% to an all-time high, while Bitcoin and the broader cryptocurrency market showed weakness [3] Market Sentiment - The sell-off in Bitcoin was counterintuitive to the overall market sentiment, as positive developments in US-China trade negotiations were occurring simultaneously [2] - On-chain analysts indicated that weak buying sentiment was a likely cause for the unexpected drop in Bitcoin's price [4] Institutional Demand - US Spot Bitcoin ETFs saw net inflows of approximately $200 million, but this was significantly lower than recent accumulation trends, indicating subdued institutional interest [4][6] - Glassnode reported that current inflows are less than 1,000 BTC per day, which is notably lower than the over 2,500 BTC per day seen at the start of previous major rallies [6] - The analysis concluded that while demand is recovering, it lacks the intensity needed to push Bitcoin past the $116,000 resistance level, making the market vulnerable to pullbacks [6]