Bitcoin ETFs Face $826 Million Drain As Selling Pressure Builds

According to data from Farside Investors, institutional money flowed out of US spot Bitcoin ETFs right through the last full trading day before Christmas.

Net outflows on Christmas Eve reached a little over $175 million. That was part of a string of weak sessions: total net outflows for the prior five trading days added close to $826 million. Since December 15, every trading day closed with net selling except December 17, which drew inflows of $457 million.

Institutional Outflows

Market participants pointed to routine year-end moves as a major factor. Reports have disclosed that tax-loss harvesting — where traders sell positions to realize losses for tax purposes — has been heavy this month.

One trader on X, using the name Alek, said most selling is tied to tax reasons and may fade within a week. Traders also flagged a record options expiry on Friday as a force that can sap appetite for risk ahead of large settlements.

Pressure In US Trading Hours

Data showed downside was strongest during US trading sessions. The Coinbase Premium — a measure comparing Coinbase’s BTC/USD price to Binance’s BTC/USDT — spent much of December below zero, signaling weaker buying in the US market.

Crypto analyst Ted Pillows summed up the flow pattern, saying the US had become the biggest seller while Asia played the role of the main buyer. That split can limit how high Bitcoin holds during rallies if US demand doesn’t return.

Liquidity Inactive

Other traders contend that negative ETF flow numbers don’t mean the cycle is over. Based on reports shared on social channels, the path back usually goes price first, flows then.

Price finds a base and then flows flatten, before fresh inflows appear. In this view, current liquidity looks inactive rather than broken. That leaves room for a bounce once seasonal selling subsides.

On-Chain Signals

On-chain metrics offer some comfort. Long-term holders are not rushing to sell at once. Realized gains show some profit-taking, but not the kind of extreme that marks a terminal peak. That pattern fits the idea that selling is being absorbed by other hands. If selling is near exhaustion, larger buyers could step in when ETFs turn neutral or positive.

Outlook For The Coming Months

Investors will watch ETF flows closely after the holidays. If flows move toward neutral, price could stabilize and then climb without needing huge new demand. The mix of tax selling and options-related positioning suggests some of the current weakness may be temporary. Still, traders should expect choppy moves while US buyers remain sidelined.

Featured image from Pexels, chart from TradingView