Bitcoin ETFs Record $681M in Weekly Outflows as Whale Positions Signal Potential Bullish Reversal

Sharp Reversal Marks Opening Week of 2026

Spot Bitcoin exchange-traded funds experienced a turbulent start to 2026, recording combined net outflows of $681 million during the first complete trading week of the year ^[1]. The withdrawal pattern marked a stark contrast to the optimistic opening days, as four consecutive sessions of redemptions overwhelmed earlier positive momentum.

The heaviest single-day outflow occurred on Wednesday, when Bitcoin ETF products shed $486 million, according to data from SoSoValue ^[1]. This was followed by $398.9 million in outflows on Thursday and an additional $249.9 million on Friday ^[1].

The week had begun with strength, as Bitcoin ETFs attracted $471.1 million on January 2, followed by a substantial $697.2 million inflow on January 5 ^[1]. However, this early enthusiasm quickly evaporated as macro concerns took hold.

Spot Ether ETFs mirrored the negative trend, posting approximately $68.6 million in net outflows on a weekly basis, bringing total net assets to around $18.7 billion ^[1].

Macro Uncertainty Drives Risk-Off Sentiment

Vincent Liu, chief investment officer at trading firm Kronos Research, identified macroeconomic uncertainty as the primary catalyst behind the sudden shift in investor sentiment ^[1]. He explained that changing expectations surrounding monetary policy and increasing global risk factors were influencing market positioning.

"With Q1 rate cuts looking less likely and geopolitical risks rising, macro conditions have turned risk-off," Liu told Cointelegraph ^[1]. "As traders wait for clearer positive signals, reduced risk appetite is spilling into crypto."

Liu emphasized that market participants are now closely monitoring upcoming US Consumer Price Index data and Federal Reserve guidance for indications of when monetary easing might resume ^[1]. "Until clearer signals emerge, positioning is likely to remain cautious," he added ^[1].

Whale Behavior Points to Bullish Pattern

While institutional ETF flows turned negative, Bitcoin whale activity is presenting what analysts consider a historically bullish signal. Data from TradingView shows that whale long positions on Bitfinex have begun declining after reaching a peak of 73,000 BTC in late December ^[2].

Commentator MartyParty noted that "Bitfinex whales are aggressively closing $BTC longs, a signal that historically precedes massive volatility" ^[2]. This pattern previously emerged in early 2025 when Bitcoin was stagnating around $74,000 ^[2].

Using Wyckoff method analysis, MartyParty pointed out that the April downturn in long positions coincided with BTC reaching sub-$75,000 lows, which marked a "spring" bottom that initiated a new uptrend ^[2]. "The flush cleared leverage and ignited a 50% rally to $112k in just 43 days," the analysis stated ^[2].

With Bitcoin currently consolidating near $91,500, a similar pattern could target prices above $135,000 ^[2].

Broader Distribution Signals Market Maturation

Onchain analytics platform CryptoQuant revealed that whale holdings have decreased by over 200,000 BTC throughout 2025, while smaller investor classes have increased their exposure ^[2]. This shift indicates what CryptoQuant describes as a "maturing market cycle" ^[2].

Contributor CryptoZeno wrote that "Bitcoin seems to be transitioning from a cycle dominated by whale-driven accumulation into a phase supported by a wider base of investors" ^[2]. This type of ownership distribution is commonly observed in maturing market cycles, where volatility persists but long-term trends gain stability as ownership becomes more broadly distributed ^[2].

Traditional Finance Continues Expansion

Despite volatile market conditions, Morgan Stanley has filed with the US Securities and Exchange Commission to launch two spot crypto ETFs tracking Bitcoin and Solana ^[1]. The move followed Bank of America's decision to allow advisers in its wealth management businesses to recommend exposure to four Bitcoin ETFs ^[1].