Bitcoin Faces Liquidation Risk as ETF Outflows Slow

Bitcoin faces a potential third October liquidation wave after futures positions increased despite falling prices, alongside $228.4 million in weekly U.S. spot exchange-traded fund outflows, according to CryptoNews.

Futures Open Interest and Liquidation Risk

Bitfinex Alpha analysts reported a 4.3% growth in futures open interest between October 12 and 15, even as Bitcoin's price declined. Traders rebuilt leveraged exposure without the sustained spot buying analysts consider necessary for a healthy recovery. Analysts identified $79,821 as a potential trigger for forced selling, warning that a break below this level could prompt selling within an accumulation band spanning $77,600 to $80,400. A recovery above $84,400 would put the average Bitcoin ETF investor back in profit, according to Bitfinex estimates.

ETF Outflows and Market Demand

Data from Farside Investors showed that U.S. Bitcoin ETFs lost $228.4 million between October 12 and 16, representing a 66.4% decrease in weekly net withdrawals compared to the previous week's $678.9 million. Bitfinex analysts estimated net 30-day apparent demand at approximately negative 50,000 BTC, indicating that estimated demand remained below available supply over that period. Meanwhile, newer whale holders—defined as large holders with coins held for fewer than 155 days—accounted to 33% of total whale realized capitalization, up from 18% at the start of the year, with an average cost basis near $77,000.

Key facts

• U.S. Bitcoin spot ETFs recorded $228.4 million in weekly outflows from October 12 to 16.
• Bitfinex futures open interest grew 4.3% between October 12 and 15 despite falling prices.
• Bitfinex identified $79,821 as a potential trigger level for forced selling.
• Newer whale holders held an average cost basis near $77,000.