Investors pulled $635.49 million from US spot Bitcoin (BTC) exchange-traded funds (ETFs) on October 22. The money left before BTC fell far enough to hit the level where ETF holders have historically sold hardest.
A day earlier, the same funds had taken in $528.40 million. New research from DWF Labs pins down that level, and BTC now trades close to it.
Bitcoin ETF Money Heads for the Door a Day After Pouring In
The October 22 outflow was the largest single-day withdrawal since June 25, according to SoSoValue. It ended a 3-day run of inflows worth about $1.08 billion.
That run began with $526.6 million on October 19, the funds’ biggest day since September 22. October’s net flows now stand at roughly $174.5 million in withdrawals.
Investors sold while BTC still traded above a level that new research ties to heavier ETF selling. DWF Labs, a crypto market maker, studied spot Bitcoin ETF flows since January 2024.
Its research found that selling picks up once 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.
Average daily flows then swing from about $74 million in inflows to $72 million in outflows. Flows worsened in 19 of the 24 cases DWF examined.
Based on Binance daily closes, BTC ended October 22 about 5.9% below its October 4 high of $86,530. That puts the 7% threshold near $80,470.
DWF also found that ETF flows tend to follow price moves. Flows were still positive on the peak day at 7 of 8 market tops.
October’s flows moved the same way. Money arrived as BTC rallied into October 21, then left when the price fell.
Bitcoin Gives Back Its Rally as the 7% Line Starts to Shift
The price told the same story. BTC dropped 3.41% over 24 hours to $81,297, per BeInCrypto Markets. The ETF flows tracked its price swings over the past week.
Based on Binance daily closes, BTC climbed from $82,245.93 on October 15 to $84,093.42 on October 21. The advance stalled near $85,000. BTC closed October 22 at $81,416.09, down 3.18% from the prior day’s close.
The 7% threshold is also set to move. Once the October 4 high drops out of the 20-day window, the next reference point is October 5’s close of $85,766.87. That would lower the trigger to roughly $79,760, unless BTC closes above $85,766.87 first.
However, DWF’s data suggests such selling tends to fade. After past 7% breaks, flows hovered near zero the next week and turned positive the week after.
The firm noted its sample shows a clear pattern but not statistical proof. The next few closes will show whether ETF outflows deepen if BTC closes below that line.
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