Bitcoin plummets towards dangerous $56,100 price floor as massive ETF outflows signal demand crisis
At some point in every cycle there is a similar moment where the story stops being about the charts and starts to be about the cash.
You can see it in traders’ conversations, jokes dry up, group chats turn into screenshots of liquidation ladders, and everyone suddenly cares about the same thing: collateral, balances, speed of trades, and what they have to sell to keep everything else afloat.
That moment came this week in Bitcoin and silver, two markets that rarely share the same headlines.
Since last week, Bitcoin has fallen about 24%, from about $90,076 to $66,700. Silver’s decline was even steeper, falling by about 34% over the same window. Gold is down more than 6%. U.S. stock futures fell, down about 2%. The dollar rose, gaining about 2% on DXY. Crude oil prices rose by about 1.6%.
That combination is important because it looks like stress rather than rotation. When the dollar is rising and your biggest risk assets are falling, your instinct is to scale back trades, raise capital, and deleverage to ride out the next headline.
And the headlines have done a lot of work.
There was a trigger for the silver crash, and leverage became more expensive.
Silver moved like a trapdoor.
The immediate catalyst was mechanical. The Chicago Mercantile Exchange has margin requirements on precious metals, asking traders to set aside more cash to hold positions after a period of extreme volatility.
Silver futures plunged in response to the move, and gold also fell as the new rules squeezed leveraged players who rode the bull market.
Take a look at the details and you’ll see why it was such a hit. CME Clearing increased margin requirements on COMEX silver in late December, raising the initial requirement from $20,000 to $25,000 and then raising it again to $32,500 just a few days later.
The squeeze intensified from there, and by late January CME moved to steeper percentage-based settings and raised interest rates again in early February (from 11% to 15%), forcing traders to post significantly more collateral per contract. Now, cash requirements are increasing even more as prices rise, creating a compounding squeeze that forces leveraged longs to quickly reduce risk when the market reverses.
For those operating with high leverage, this is effectively a sudden reduction in position size, fueling rapid and chaotic unwinding when prices move.
Higher margins force decisions. Add cash, reduce size, or close your position. When enough people receive the same message at the same time, sales become the only language the market understands.
Silver didn’t fall because the world suddenly didn’t need it anymore. The price fell because it was a leveraged bet, and the cost of that bet only went up.
That’s why this week feels bigger than a typical crypto drawdown. Stress shows up in places that should be boring.
Bitcoin is falling through the floor one level at a time
Bitcoin’s decline has been steep, but structured.
The chart since January 28th appears to be going down a flight of stairs with a short pause, then a break, then another quick flash. From the baseline, Bitcoin fell below the low $80,000s on the first day, then lost the low $80,000s, then hit the $70,000s, and is currently fighting to stay in the high $60,000s.
The major levels in my two-year channel map are doing their part and that’s the problem for the bulls.
In the following 30 minute time slots:
- The first meaningful break occurred when Bitcoin lost the $83,500 area.
- The next breakdown was in the $77,000 area, where the market tried to balance but failed.
- The moment the tone changed was the 2024 high of $73,600, a level that has been a source of memory for months.
This $73,600 line is the line that my long-term chart below screams at. Bitcoin is supposed to treat previous highs in strong trends as support. Once you lose that, the market starts looking for the next shelf. The next shelf is near $56,100, a level that has been tested many times in 2024. Below that, you start looking into the $40,000 range.
The path to $56,100 is more of a risk map than a prediction, as the price is hovering around $70,000. A decline of around 20% is likely, and that is likely if the market is forced to sell rather than choosing to sell.
ETF flows helped build the bull market and are now part of the selling pressure
The cleanest way to understand this Bitcoin movement is to stop arguing about the story and start looking at the plumbing.
Spot Bitcoin ETF flows have been the most important marginal signal since these products began operations. If flows are consistently positive, dips will be bought sooner. If the flow reverses and remains negative, the market loses its cushion.
According to Farside’s data, the late January to early February tape has been defined by heavy spills and rebound failures.
Days before and after current breakdown:
- *On January 29, Bitcoin ETF net spot flows were approximately -$817.8 million.
- Net flows on January 30 were approximately -$509.7 million.
- On February 2, the market finally calmed down, with net inflows increasing by approximately $561.8 million.
- On February 3, the bid fell again to approximately -$272 million.
- On February 4th, the selloff returned significantly to approximately -$544.9 million.
It’s a market that can’t sustain good news. One day of strong inflow lands, then a rebound appears and is swallowed up by the next wave of supply.
This does not mean that the ETF is the only driver of price, but it is the best indicator of whether there is real demand in the world’s largest and most regulated lamp market.
Current patterns say demand is passive and supply is comfortable.
The story from October to February is a long mood swing
If you want a longer story, head back to October 2025, as that looks like the beginning of the finale.
In early October, ETF bidding was still in full swing. Far-side data shows approximately the following net inflows:
- +$675.8 million on October 1st
- +$627.2 million on October 2nd
- +$985.1 million on October 3rd
- +$1.25 billion on October 6th
As the push continues to disappear, people feel it is wise to buy the push in this fashion.
Then, in late October, the atmosphere changed completely. On October 16, net flows reversed to approximately -$530 million. According to Pharcyde, the outflows have since increased further, with some terrible days on October 29th and October 30th, when they totaled approximately -$470 million and -$488.4 million, respectively.
November saw a record number of spills that sounded like a warning siren. On November 20 alone, net outflows were approximately $903.2 million.
I had whiplash in January. Inflows returned, registering an increase of approximately $697 million on January 5th. After that, the sell-off returned to about -$243 million on January 6th, -$486 million on January 7th, and -$817 million on January 29th.
The important thing is not to get attached to the day, the important thing is the character of the tape. When flows become highly choppy, the market becomes vulnerable because positioning becomes weak.
Since January 15, there have only been two days with net positive flows.
A weak positioning collapses due to macro pressure.
Macro pressures are rising again, and inflation is causing markets to feel stalled.
Bitcoin bulls can handle bad headlines when liquidity is expanding. When central banks send a different message, even quietly, they struggle.
On January 28, 2026, the Federal Reserve’s implementing document set the federal funds target range at 3.5% to 3.75%.
A handle of 3 suggests that rates have already been cut relative to the peak, but it’s the underlying tone that matters, inflation still matters, volatility still matters, and policy won’t change just because the market wants it to.
Inflation warnings are getting louder and coming from more serious sources.
PIIE’s analysis argues that the risk of higher inflation in 2026 has been underestimated, citing tariffs, fiscal trends, tight labor markets and changing expectations as potential factors.
Tariffs are important here because they are the kind of policy that can hit growth and prices at the same time, and markets dislike that combination.
The Fed itself is charting the path for research. The FEDS note indicates that higher trade costs, including tariffs and disruptions, could push up CPI inflation, and the impact is tangible.
The political class is in disarray and the economic class is slow. The market trades both, but it rarely does so gracefully.
Even the IMF’s tone has shifted to be wary of trade disruption. In January, the IMF noted that the global economy was showing resilience after the tariff shock, but warned of growing risks and negative impacts from trade disruption over time.
Meanwhile, the world of trade policy itself is said to be a roller coaster. CFR points to the return of the threat of tariffs and the uncertainty surrounding the White House-led trade strategy.
Put all this together and you get the feeling that traders keep saying privately: the recovery trade looks like it wants to emerge, but inflation risk is pulling it back into the cage.
Bitcoin’s best moments occur when the market believes liquidity is coming and inflation is benign enough to allow it.
Now, that calmness is missing.
Cross-asset signals look like a squeeze on the dollar, Bitcoin is acting like a high-beta technology again
Bitcoin shows a clear relationship to the broader risk complex.
It moved more closely with U.S. stock futures than gold, and tended to move in the opposite direction when the dollar strengthened. This is a fancy way of saying Bitcoin still trades like a risky asset when stress is high, but stress has been high this week.
This is also why the silver crash is important for crypto readers.
When silver is down double digits and Bitcoin is down double digits, the common denominator is leverage and forced selling. The first wave hits the busiest deals, and the second wave hits anything that sells quickly.
Virtual currency can be sold at any time.
Oil prices are rising for the wrong reasons and that’s increasing anxiety
Oil prices have also been rising modestly over the same period, but the reasons for this are not reassuring.
New geopolitical risks are emerging regarding Venezuelan supplies. Headlines of price movements related to lockdown announcements and broader supply risks following Maduro’s takeover continue to keep markets on edge.
At the same time, the medium-term oil story is about oversupply, with Trafigura warning of a “super oversupply” in 2026, with supply growth outpacing demand.
Adding fuel to geopolitical risks is a pernicious factor when markets are already worried about inflation. That adds noise to the inflation picture, puts pressure on the Fed, and worries traders already staring down margin calls.
What to watch next if you’re trying to get through next week
The temptation is to pick the bottom and build a story around it. The market has not yet acquired such luxury.
Here’s a cleaner way to display this:
Bitcoin has one job to do if it wants to stop the bleeding, get its $73,600 back, and keep it. This is a 2024 high and is now the dividing line between a tough correction and a deeper reset towards the next major shelf around $56,100.
Read my article from November. In this article, we have literally evoked this very scenario below.
ETF flows also have a job of stabilization. The far side table has been swinging from massive outflows to brief inflows and back again, and that’s what a fragile market looks like.
Macros have their own job. Please calm down. That means inflation expectations need to stop rising, the tariff headlines need to stop adding to the uncertainty, and the Fed needs breathing room. That’s because the market is currently trading as if it is constantly preparing for the next upside in inflation expectations.
Silver is a wild card. Because silver has already shown us what happens when leverage encounters a margin hike.
That’s why this week feels like the moment when margin calls went global.
Cryptocurrency traders have experienced forced sales over the years, and forced sales typically begin and end within an ecosystem.
This time, stress is showing up in Old World, metals, interest rate worries, trade disruption headlines, and even the dollar.
The story is still Bitcoin, but the setting seems broader and far less forgiving.
(Tag translation)Bitcoin
