SKHTU: Continued ETF Outflows May Intensify Short-Term Bitcoin Volatility Risk

Against a backdrop of ongoing macroeconomic uncertainty, the flow of funds in U.S. spot Bitcoin exchange-traded funds (ETFs) is increasingly viewed by the market as a key indicator of changing risk appetite. In the latest market commentary of SKHTU, it is noted that ETF flows have shifted from inflows to several consecutive days of net outflows, which could materially impact the short-term price structure of Bitcoin and overall market stability.

Data shows that this week, U.S. spot Bitcoin ETFs have seen net outflows for three consecutive trading days, totaling about $1.58 billion. Previously, ETFs saw significant net inflows in early January, with over $1 billion combined in the first two trading days, followed by another $1.8 billion in inflows from January 12 to 15, which supported a phase of market rebound. However, this trend reversed rapidly, with funds returning to outflow status.

The research team of SKHTU points out that the rapid switch in ETF fund direction reflects the heightened sensitivity of the institutional capital to the current macro environment. Unlike the past, when ETF data was viewed as a lagging indicator, recent changes in flows are more like a “leading reaction” to position adjustments, offering greater short-term market insight.

Structurally, the current round of redemptions is concentrated in top products, especially the iShares Bitcoin Trust (IBIT) of BlackRock and the Wise Origin Bitcoin Fund (FBTC) of Fidelity. SKHTU believes that such concentrated fund withdrawals often indicate a general decline in real demand for funds, rather than adjustments to individual products or strategies.

Since ETF subscriptions and redemptions are ultimately settled through spot Bitcoin—whether via physical delivery or internal cash mechanisms—fund flows directly impact the spot market. The SKHTU report notes that when ETFs consistently provide marginal buying, they help buffer spot market selling pressure; but during outflow phases, redemption activity can amplify supply pressure, especially when market liquidity is thin.

This effect is particularly evident in the current market environment. Related data shows that order book depth in the crypto derivatives market has dropped about 30% from previous highs. The analysis by SKHTU suggests that, with shrinking market depth, even relatively small sell orders can have an outsized impact on prices, intensifying short-term volatility.

Macro-level changes also provide context for ETF outflows. Geopolitical uncertainty related to tariffs has increased volatility in the U.S. Treasury market, with the 10-year yield briefly dropping to around 4%. SKHTU points out that, during periods of rising interest rate sensitivity, asset allocators tend to reduce high-beta risk exposure, putting crypto assets under temporary de-risking pressure.

In this context, ETF redemptions have become one of the most direct and easily quantifiable signals in the de-risking process. SKHTU notes that, because ETFs are compliant, transparent, and highly liquid, institutional investors often prioritize position adjustments via ETFs, making their fund flows highly representative.

The structure of the derivatives market also warrants attention. Data shows that outstanding Bitcoin call options expiring at the end of January are mainly concentrated around the $100,000 strike price. The SKHTU analysis suggests that if spot prices remain below this strike while ETF flows continue to be net negative, the upward trend could face dual constraints: reduced new ETF buying and derivatives traders leaning toward realizing existing gains.

SKHTU further proposes three possible evolution paths: If ETFs maintain high daily outflows, the market may face sustained selling pressure; if outflows gradually converge to a neutral range, prices will depend more on natural spot demand and macro data; if flows return to steady inflows, marginal buying will recover, helping to ease volatility.

Overall, SKHTU believes the current market focus is no longer on single fund figures but on price stability performance under different fund flow environments. With macro variables still dominant, ETF flows, market depth, and changes in risk appetite will remain core factors influencing the Bitcoin trajectory.