Market Downturn and Bitcoin's Correlation
Bitcoin (BTC) experienced a significant decline, falling to $102,000 on Tuesday. This drop of 7% for the week mirrored weakness in broader risk assets, with Nasdaq 100 futures also seeing a 1.67% decrease. Historical data indicates a strong correlation between the Nasdaq and Bitcoin; when the Nasdaq falls by more than 1.5% in a single day, Bitcoin has historically shown a 75% probability of a negative return, averaging a decline of -2.4%.
Despite this macroeconomic drag, analysts suggest that Bitcoin's current price weakness is not fully justified by its fundamentals. Financial conditions are noted as remaining loose, and equity markets have recently achieved record highs.
"Bitcoin has been underpriced relative to the macro backdrop," one analyst observed, emphasizing that the current dip appears to be more sentiment-driven than structurally based.
Spot Bitcoin ETF Inflows and Investor Demand
While spot Bitcoin ETF inflows have notably slowed since early October, the overall net inflow balance remains positive. The first two weeks of the fourth quarter saw over $5 billion in net inflows, whereas the past four weeks have recorded cumulative outflows of approximately $1.5 billion. This cooling of demand, however, is counterbalanced by persistent investor appetite for BTC exposure.
This slowdown in inflows has been observed across global crypto exchange-traded products (ETPs). Last week, all crypto ETPs experienced net outflows totaling $246.6 million, predominantly driven by $752 million in Bitcoin outflows. The iShares Bitcoin Trust (IBIT) led these outflows with $403 million, followed by Grayscale's GBTC with $68 million in exits.
On-Chain Metrics and Accumulation Trends
On-chain metrics provide a more nuanced view of the market. Sell-side pressure has decreased week-over-week, falling from $835 million to $469 million, while long-term accumulation continues to show strength. Bitcoin whales have exhibited cautious repositioning rather than panic, sending modest inflows of around 4,900 BTC to exchanges.
Exchange-held reserves have fallen to 2.85 million BTC, further reinforcing the broader accumulation trend, even as BTC trades below its 200-day moving average of $108,000 and the short-term holder cost basis of $113,000.
Liquidity Signals and Potential Turning Points
Data suggests that the Stablecoin Supply Ratio (SSR) has returned to the 13–14 range, a zone previously associated with Bitcoin's rebound earlier this year. Historically, this level has acted as a liquidity turning point, where increasing stablecoin balances indicate rising "buying power" on the sidelines.
With Bitcoin currently trading at $102,200, the low SSR indicates that stablecoin liquidity is quietly building again, potentially setting the stage for a relief rally or the final bullish phase of the current cycle. However, it is noted that each successive SSR rebound has shown diminishing strength, suggesting that while another upside phase may still be possible, the market's underlying liquidity momentum could be gradually fading.