Bitcoin fell below $81,000 on Thursday while Ethereum dropped close to $2,400, causing the top ten cryptocurrencies to decline over a seven-day period. The market experienced nearly $1 billion in liquidated crypto longs within 24 hours, with Ethereum positions suffering the most significant losses. Spot Bitcoin funds shed $484.9 million on Wednesday, marking their worst day since spring, followed by an additional $244 million in outflows on Thursday. This activity flipped October’s net flow to minus $400 million for the month. Ethereum funds have now seen eight consecutive sessions of outflows, totaling $640 million during that stretch.
Several factors contributed to the downturn. Tom Lee stated that Bitmine would cease buying Ethereum once it holds 5% of the supply, removing a consistent buyer present since June 2025. Funding rates for Ethereum turned negative midweek for the first time in months, indicating that traders betting on price declines outnumbered those expecting rises. Additionally, oil prices jumped due to attacks on Iranian tankers, prompting capital flight from risk assets. Despite the selloff, major cryptocurrencies rebounded in the subsequent 12 hours, with Bitcoin returning above $82,000 and Ethereum approaching $2,500.
The simultaneous reversal of institutional inflows and the emergence of negative funding rates signal a shift from a liquidity-driven rally to a leverage-dependent correction. The specific cessation of buying pressure from entities like Bitmine, combined with the structural weakness revealed by thin markets unable to sustain rising prices without new capital, highlights the fragility of recent gains. This dynamic suggests that the market is undergoing a necessary flush of excessive long positions rather than a fundamental breakdown of the broader bull case, which remains intact regarding institutional adoption and tokenization trends.
Investors should monitor the sustainability of the rebound against continued ETF outflows, particularly if October remains net negative. The divergence between price action and fund flows indicates that retail or leveraged traders are driving short-term volatility while institutional money retreats. Attention must also be paid to macroeconomic triggers, such as geopolitical tensions affecting oil prices, which can rapidly alter risk appetite across digital asset classes. The upcoming anniversary of previous market corrections adds psychological weight to current price levels, potentially influencing trader behavior in the immediate term.
