Bitcoin and Ether Struggle as ETF Outflows Deepen

Bitcoin and Ethereum are both facing renewed selling, while U.S. political tensions and exchange-traded fund (ETF) outflows added to broader risk aversion.

Bitcoin Pulls Back to Fill CME Gap

Bitcoin fell by around 2.5% on Tuesday, slipping to roughly $107,500 after failing to hold its early rebound. The decline came as traders looked for the asset to “fill” the latest CME futures gap, a technical pattern created when Bitcoin futures close at one price and reopen at another after the weekend.

Historically, such gaps have acted as magnets for price movement, often being closed within days.
“Bitcoin opened with a small CME gap below this week, and although part of it was filled, there’s still room for a further dip,” noted crypto analyst Daan Crypto Trades.

The key short-term level now lies near $107,000, where traders expect bulls to defend support. If Bitcoin continues sliding toward last week’s lows near $103,000, sentiment could turn sharply more bearish. Some analysts, including trader Crypto Tony, warned that a deeper correction could even test the $100,000 mark, or briefly dip below it, before the next leg higher.

Ethereum Rejected at $4,000 as Spot Demand Weakens

Ethereum mirrored Bitcoin’s weakness, falling back below the $4,000 mark after a failed breakout attempt. The world’s second-largest cryptocurrency has repeatedly faced resistance near this psychological barrier, with analysts saying sustained momentum above it is critical for the next uptrend.

“$4,000 remains a strong resistance zone,” said analyst Philakone. “Without fresh buyers, every breakout attempt risks fading quickly.”

Data from SoSoValue showed that spot Ethereum ETFs have seen consistent outflows, six of the past eight trading days, with a total of more than $640 million withdrawn. The lack of inflows signals weak institutional appetite, limiting ETH’s ability to build on its earlier recovery from October’s lows around $3,500.

Technically, Ether is also showing signs of potential downside. A developing “bear flag” pattern on the 12-hour chart suggests the possibility of a drop toward $3,100, though some analysts remain optimistic that ETH could soon regain momentum if buying pressure returns.

ETF Outflows Reflect Political and Market Uncertainty

Meanwhile, spot Bitcoin and Ethereum ETFs extended their losing streaks as investors pulled back amid deepening political unrest in the U.S. According to SoSoValue, Bitcoin ETFs recorded more than $40 million in net outflows on Monday, their fourth straight day of withdrawals, while Ether ETFs shed over $145 million.

The declines coincided with mounting protests dubbed the “No Kings” movement, which erupted across major U.S. cities as the federal government shutdown stretched into its third week. Analysts say the turmoil is shaking investor confidence in American institutions.

“This is not just political theater, it’s a stress test for institutional confidence,” said analysts from Bitunix in a market note. “If the gridlock continues, its effects could extend beyond liquidity and begin eroding structural trust in the U.S. system.”

Vincent Liu, chief investment officer at Kronos Research, described the broader market mood as “a de-risking phase.”
“Investors are locking in profits and moving to the sidelines,” he said. “The erosion of trust in policy stability is pushing capital toward safer assets.”

The combination of technical pressure, fading ETF demand, and macro uncertainty has created a fragile backdrop for digital assets.

While Bitcoin and Ethereum remain far above their yearly lows, traders caution that volatility could persist until clearer political and economic direction emerges.