## Financial Bloodbath Chain: What Are US Institutions Doing to Exit the Bitcoin Market?

Over the past three weeks, Bitcoin’s price has hovered around $90.65K, but the cryptocurrency market is experiencing an ongoing "financial bleeding" phase. Three major warning signals have simultaneously turned red: the largest US exchange’s premium index has plunged into negative territory, Bitcoin investment funds are recording record net withdrawals, and BTC reserves on platforms are continuously shrinking — these three indicators reveal a tense reality: institutional capital flows from the US market are withdrawing on a large scale.

### **Triple Alarm: Simultaneous Deterioration Signals**

**Coinbase Premium Index Deeply Negative**

The Bitcoin premium index on Coinbase compares Bitcoin prices on US-regulated exchanges with the global average price. When this index is positive, it indicates US institutional investors are actively buying; when negative, it usually suggests they are withdrawing or selling off.

Since October 31, this index has **been continuously 24 trading sessions in negative territory** — the first time in 2024–2025. What does this deep negative mean? Bitcoin prices on Coinbase are consistently below the global average, indicating that US professional investors are not only halting purchases but also **reducing positions or engaging in risk hedging transactions**.

**Bitcoin ETF Funds Break Withdrawal Records**

US spot Bitcoin ETF products — tools expected to channel institutional funds into the market — are now becoming the largest sources of capital outflow.

As of November 21, all Bitcoin ETF funds recorded **$3.79 billion in net withdrawals in November**, surpassing the $3.56 billion record in February. Among them, BlackRock’s IBIT fund withdrew $2.47 billion, Fidelity’s FBTC withdrew $1.09 billion — these two companies account for 91% of total net withdrawals. A single day, November 20, even saw **$903 million in net withdrawals**, the second-highest ever.

**Bitcoin Reserves on Exchanges Shrink by 18%**

Capital is not only leaving ETF funds but also from exchanges in general. In November compared to October, platforms recorded net withdrawals of about **8,181 BTC** valued at approximately $842 million. Looking at the bigger picture, total Bitcoin reserves across all centralized exchanges have decreased by **18%** since the end of 2024, now totaling just over 2.4 million BTC. This ongoing "blood flow" indicates investors are transferring assets from trading platforms to personal wallets or other channels, gradually draining liquidity from exchanges.

( **Reaction Chain: Market Structure Is Changing**

**US Trading Sessions Lose Institutional Buying Power**

When the Coinbase Premium Index plunges deeply into negative territory, it directly impacts Bitcoin’s price movements in different sessions. The lack of buying pressure from US institutions makes price recoveries weaker. Analysts observe that recent upward momentum for Bitcoin mainly originated from Asian and European sessions, while **the US session has become a drag**.

**Reversal of Structural Buying from ETFs**

Previously, spot Bitcoin ETFs were the main structural buyers, but now they have turned into net sellers. With the current withdrawal pace, the average daily net outflow exceeds the approximately 450 BTC/day mined by miners, causing the market to accumulate a net supply pressure, leading to prolonged downward price pressure.

**Tiered Liquidity and Diverging Prices**

Amid widespread capital outflows, different platforms show clear segmentation. Platforms dominated by institutions are experiencing the strongest withdrawals, while some smaller platforms with retail user bases are acting as "final buyers." This tiered structure can lead to **persistent price discrepancies for the same asset across platforms**, creating arbitrage opportunities and increasing trading costs.

) **Deep Analysis: Who Is Withdrawing? Why Are They Doing It?**

**US Institutional Strategy Adjustment**

Data clearly indicates that this capital withdrawal wave is led by US institutions. Possible reasons include:

— **Year-end profit-taking pressure**: As Q4 approaches, some funds choose to realize gains or reduce exposure to high-risk assets.

— **Macroeconomic instability**: Rising US bond yields, a strong USD, and other traditional financial factors are prompting capital reallocation.

— **Regulatory concerns**: Increased enforcement by regulators in the crypto space is causing organizations to worry about compliance risks.

**What Does the "Smart Money" Indicator — Negative Premium — Signify?**

Historical data shows that when the Coinbase premium index plunges deeply into negative territory like now, it often signals a **short-term price bottom**. Similar patterns appeared in cycles of 2019 and 2022 — during these periods, institutions were extremely pessimistic at local lows, followed by market recoveries.

**Capital Flows Into On-Chain Ecosystem**

Not all capital leaving exchanges is exiting the market. A significant portion of Bitcoin has shifted into decentralized finance (DeFi) ecosystems, participating in staking, liquidity provision, or lending. On-chain data shows Bitcoin locked in DeFi protocols reaching record highs, indicating that capital is simply seeking higher-yield scenarios.

### **Market Impact: Both Dangerous and Potentially Promising**

**Short-term Pain, Long-term Gains Possible**

Continuous exchange reserve declines exert short-term downward pressure, but in the long run, this is a positive signal. Most of the withdrawn Bitcoin has moved into long-term storage, reducing circulating supply. When demand recovers, **even small buying efforts can trigger strong price rallies**, creating a "supply shock."

**Risks in Derivatives Market Accumulating**

While spot markets are experiencing capital outflows, the funding rate of perpetual contracts remains relatively high, indicating that long positions using leverage have not yet fully unwound. The divergence between weak spot prices and strong derivatives increases the risk of cascading liquidations. Sharp price movements could trigger a chain of liquidations.

**Transition Phase from Old to New Capital**

The market is currently in a transition phase between old and new capital. **Early profit-taking by US institutions is withdrawing, while new capital — from Asia or traditional financial institutions with long-term strategies — has yet to enter strongly.** This "handover" stage is characteristic of a market bottom formation.

### **When Will a Turning Point Occur?**

**Key Signals to Watch**

A stable market requires monitoring these indicators:

— **Positive Coinbase Premium Index**: The most direct evidence of US institutional demand returning.

— **Slowing ETF withdrawals**: When daily net withdrawals drop below $100 million, selling pressure may be easing.

— **Consistent net capital inflows into exchanges**: Continuous net inflows often signal that a market bottom has been reached.

**Potential Catalysts**

Events that could trigger a turning point include:

— **December FOMC meeting**: If the Federal Reserve signals dovish policy, risk appetite could revive.

— **Quarterly reports from listed companies**: Major firms announcing Bitcoin holdings can influence market sentiment.

— **Technical breakthroughs**: Surpassing the previous high of $68,000 could break the current downtrend and attract trend-following traders.

**Lessons from History**

According to Bitcoin halving cycles, we are currently in the 18th month after the third halving. Historical data shows that this phase often involves **significant volatility and institutional position adjustments**, but also serves as an accumulation period for the next major rally. Experience suggests that **the darkest times often hide the greatest opportunities**.

When the Coinbase premium index turns positive again, ETF capital flows recover, and exchanges record continuous net inflows, the market may be approaching a turning point. With Bitcoin at $90.65K, prudent investors should not be pessimistic but instead closely monitor these key indicators to find opportunities during market cold spells.