Bitcoin Drops as ETF Outflows Rise But Show No Signs of Panic

Bitcoin's price fell below $70,000 in early February 2026, pulling down other cryptocurrencies with it. Spot Bitcoin exchange-traded funds saw outflows during this drop, but the selling patterns do not match investor panic seen in past crashes.

Background

Bitcoin hit highs above $100,000 late last year before starting its slide. By February 12, it traded around levels that wiped out gains from recent months. This drop caught many off guard, with talk of a full crypto winter returning. But data from trading platforms and fund flows tells a different story.

The market has cycles that repeat. Past bear markets lasted about 365 days from peak to bottom. Drops of 70% to 80% happened before, like in 2018 and 2022. Right now, the decline sits at around 45% from the top. Analysts point to October 2026 as a possible low point, based on these patterns.

US institutions play a big role now. They buy and sell through regulated platforms like Coinbase. When prices fell, Bitcoin traded cheaper there than on global exchanges like Binance. This gap, known as the Coinbase premium, turned negative for 21 days straight. It hit minus $167 at its worst, the lowest in a year.

Stablecoins, used to trade crypto, lost $14 billion from December to February. Hedge funds pulled back too. Yields on these strategies dropped below 5%, so they closed positions. CoinShares data shows their Bitcoin ETF exposure fell by a third.

Key Details

ETF Flows During the Drop

Spot Bitcoin ETFs hold about 6% of all Bitcoin. When investors pull money out, fund managers sell Bitcoin to cover. On February 3 alone, US Bitcoin ETFs had $272 million in net outflows. Each dollar out meant Bitcoin sold into the market.

These outflows kept going through the crash. No big buyers stepped in to support prices, as often happens in stress. Instead, steady selling from institutions marked the period. This mechanical process follows rules set when the funds launched.

Historical Patterns in the Decline

February and March often bring relief rallies. Prices bounce 65% or more, fooling some into thinking the worst is over. But then declines resume. May tends to worsen, while July sees gains of 15% to 20%. October and November mark bottoms in past cycles.

From now, about 200 days could pass before a low around October 6. A 70% to 75% drop would put prices at $36,000 to $40,000. Current levels match 30% into the correction, leaving room for more downside if history holds.

Corporate treasuries and miners face pressure too. Boards question holdings as prices fall. Mining costs rise if Bitcoin stays low, squeezing profits.

"We've probably got another 200 days or so before this bottoms out. If we just copy this and clone that across, October the 6th is where we see the bottom based on these historic results."
— Market cycle analyst

What This Means

The ETF outflows signal institutions following their plans, not rushing for the exits. No wild swings or volume spikes show panic. US sellers stayed consistent while global traders held steady.

This setup differs from retail-driven crashes. Institutions built systems for steady in and out flows. When math changed—like low arbitrage yields—they adjusted without drama.

Prices could range $60,000 to $75,000 if no big shifts happen. Or a break below $60,000 might hit miners and treasuries hard, testing $40,000 to $50,000. Stablecoin strains could add pressure if redemptions grow.

Bitcoin's link to tech stocks stays tight. Fed moves and AI sector woes fed into the drop. But core drivers were internal: fund redemptions, hedge unwinds, and stablecoin shrinks.

Investors watch for patterns to repeat. Relief bounces might come soon, but full recovery waits later. The market shows maturity in handling stress, even as prices test nerves.