Bitcoin slips below $80,000 as ETF outflows and Fed week test holders' cost basis

Two days of heavy U.S. spot ETF redemptions and a weekend wave of forced selling pushed bitcoin briefly under $80,000, the zone where on-chain data places the average ETF and corporate treasury buyer. The Federal Reserve's Oct. 27–28 meeting now sets the tone for the week.

Bitcoin briefly fell below $80,000 on Saturday, dropping into the price band that on-chain analysts estimate as the average purchase price of U.S. spot exchange-traded fund holders and listed companies that keep bitcoin on their balance sheets. The move followed two straight days of large ETF withdrawals and set off more than $800 million in liquidations across crypto derivatives markets. It leaves the market on uncertain footing ahead of the Federal Reserve's policy meeting on Tuesday and Wednesday.

What happened

The week started strongly for the U.S. spot bitcoin funds. They took in roughly $1.07 billion from Monday through Wednesday, according to daily figures compiled by Farside Investors, with Monday's $526.7 million the biggest single day since late September. The direction then reversed. Farside recorded net redemptions of $635.6 million on Thursday and $137.9 million on Friday, a combined $773.5 million in two sessions. SoSoValue data cited by The Block showed nearly identical totals.

Thursday's withdrawals were spread across the largest products. BlackRock's iShares Bitcoin Trust lost $254.1 million that day, Fidelity's fund $217.5 million and ARK's $109.4 million, per Farside. The redemptions came as a broad selloff in technology stocks hit risk assets. Even after the late-week exits, the funds finished the five sessions with about $301 million in net inflows.

Selling turned forced on Saturday. In the four hours to 1 p.m. Eastern time, crypto traders saw about $436 million of positions liquidated, $404 million of it from leveraged bets on rising prices, according to CoinGlass data reported by The Block. Bitcoin's low was near $79,100 to $79,300, depending on the data source, before it recovered above $80,000 within hours. Total liquidations over 24 hours topped $810 million, according to both The Block and Investing.com.

The weekend also brought a sharper geopolitical backdrop. The State Department said it was cutting staff at U.S. embassies in Jordan, Lebanon, Qatar and the United Arab Emirates, the Associated Press reported, after a memo from the Director of National Intelligence warned of increased Iranian efforts to target American personnel. Brent crude was trading around $117 a barrel, according to Investing.com. Separately, BitMEX co-founder Arthur Hayes said his family office, Maelstrom, had closed its directional positions and taken profits, citing macroeconomic and geopolitical risks without giving specifics.

By Sunday, bitcoin was trading just above $80,000, according to Investing.com and crypto.news.

The debate

The $80,000 level matters less as a round number than for whose money sits around it. In its Oct. 21 weekly report, analytics firm Glassnode estimated that the average cost basis of U.S. spot ETF holders and of the corporate treasury companies it tracks both fall between $80,000 and $81,500, with the treasury group near $80,200. On Glassnode's reading, a daily close below $80,000 would leave the average holder in both groups sitting on a paper loss.

One camp reads the week as evidence that institutional demand is shallow. Glassnode said trading volume remained thin, with the 30-day average below a quarter of its level a year earlier, and that corporate treasury buying has stayed far below its late-2024 peak in every month since June. On this view, ETF flows now swing with each macro headline rather than building steadily, and holders near break-even may be quicker to sell into weakness. Hayes stepping aside fits that cautious mood.

Another camp argues the damage was mostly a leverage flush rather than a change in long-term demand. The funds still ended the week with net inflows, and Monday's surge showed buyers were willing to step in at similar prices only days earlier. The quick recovery above $80,000 on Saturday also suggests spot selling was limited once forced liquidations ran their course. The Block, for its part, cautioned against tying the drop directly to the embassy news, noting only that the reports came out at about the same time.

The Fed sits at the center of both arguments. The central bank raised its target range by a quarter point to 3.75%–4.00% in September, its first increase since 2023, and most officials' projections at the time showed at least one more hike in 2026. September consumer prices rose 3.7% from a year earlier, slightly above forecasts. Futures pricing tracked by CME FedWatch points to about a 90% chance of no change this week. Speaking in Bangkok on Oct. 16, Fed Chair Kevin Warsh declined to signal his next moves and named the October and December meetings as the key decision points for the year.

With a hold largely expected, some market commentators say the wording of the statement and Warsh's news conference will matter more than the decision itself. Guidance that keeps a December increase firmly on the table would reinforce the case for caution. Language that softens that path would strengthen the argument that last week's selling was mostly about leverage.

What it means

For investors in the U.S., Europe and Singapore, the next few days carry several scheduled events. The Fed's decision is due at 2 p.m. Eastern time on Wednesday, Oct. 28. Because Europe ended daylight saving time on Oct. 25 while the U.S. does not change until Nov. 1, the announcement falls an hour earlier than usual for European readers, at 7 p.m. in Central Europe. In Singapore it lands at 2 a.m. on Thursday.

Monthly bitcoin options on Deribit expire on Friday, Oct. 30, with open interest above $11 billion. Large expiries can add to short-term price swings. On Tuesday, Oct. 27, the registration of two Franklin Templeton funds that reinvest stock dividends into bitcoin exposure is scheduled to take effect, a reminder that new product launches continue even as flows into existing funds cool.

The main signals to watch are straightforward. The first is whether daily ETF flows turn positive again or extend the late-week outflows. The second is where bitcoin settles relative to the $80,000–$81,500 cost-basis band identified by Glassnode, which shapes how much of the institutional base is in profit. The third is the Fed's guidance on December, and the fourth is oil and the Middle East, which feed directly into the inflation outlook the Fed is weighing.

None of these points to a single outcome. They do show how closely crypto prices now follow the same forces as other risk assets, from Treasury policy to energy prices, and how much the newest wave of institutional holders sits near break-even.

This article is for information only and is not investment advice.

Sources

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