Bitcoin Rally at Risk as ETF Outflows Signal Fatigue

The powerful institutional buying wave that helped propel Bitcoin higher since early 2024 is showing clear signs of exhaustion, according to Markus Thielen, CEO of 10x Research and former portfolio manager. In an exclusive interview with Bloomberg, Thielen emphasized that the crypto market, particularly Bitcoin (BTC), is displaying all the classic indicators of market fatigue. The institutional inflows, especially from spot Bitcoin exchange-traded funds (ETFs), which served as the primary catalyst for the 2024 rally, are now at risk of reversing direction.

Thielen’s analysis reveals that the same institutional investor base that drove Bitcoin’s upward trajectory could now accelerate downside pressure if market activity continues to slow. The United States market, which has been the epicenter of institutional crypto adoption through ETF products, now faces the prospect of these same vehicles becoming sources of selling pressure rather than buying support. This potential reversal scenario represents a significant shift in market dynamics that could test Bitcoin’s recent gains.

The current market fatigue follows what Thielen describes as a ‘difficult October marked by the largest liquidation event in the industry’s history.’ These substantial losses have compounded underlying macroeconomic risks that Bitcoin has increasingly mirrored in recent months. The record-breaking liquidation event created a domino effect that has left the market particularly vulnerable to further selling pressure.

According to Thielen’s assessment at 10x Research, the October losses have fundamentally altered market psychology, with risk appetite among institutional investors showing measurable decline. The combination of technical damage from the liquidation event and growing macroeconomic concerns has created what Thielen characterizes as a ‘perfect storm’ for potential correction. This environment marks a stark contrast to the optimistic sentiment that dominated the early 2024 rally.

The potential for spot Bitcoin ETF outflows represents perhaps the most immediate threat to Bitcoin’s price stability. Thielen warns that because institutional inflows through these ETFs have been the key driver of the 2024 rally, any sustained outflow could rapidly amplify selling pressure. The very mechanism that propelled Bitcoin higher now threatens to work in reverse, creating a feedback loop that could accelerate any market correction.

Market data analyzed by 10x Research indicates that the slowing activity in ETF flows coincides with Bitcoin’s increasing correlation to traditional macroeconomic risks. This developing relationship means that pressures affecting conventional markets now have more direct impact on crypto valuations. As Thielen explained to Bloomberg, this interconnectedness means that traditional market headwinds could translate more directly into Bitcoin price pressure than in previous market cycles.

The current environment presents a critical test for Bitcoin’s institutional adoption narrative. If ETF outflows materialize and institutional investors become net sellers rather than buyers, it could challenge the long-term sustainability of Bitcoin’s institutional investment thesis. Thielen’s warning serves as a cautionary note for market participants who have grown accustomed to consistent institutional support throughout 2024.