Bitcoin Enters High-Risk Zone as Institutional Funds Continue to Withdraw, Highlighting Selling Pressure Concerns

MAY 26 (Crypto Brief) – Blockchain analytics platform Swissblock reports Bitcoin is gradually moving into a high-risk environment, driven largely by persistent institutional fund outflows—most notably net outflows from U.S. spot Bitcoin ETFs. Historical data shows whenever this metric signals structural selling pressure dominating the market, it typically aligns with systematic distribution activity by institutional players. Separately, on-chain analytics firm Glassnode noted that since May 7, U.S. spot Bitcoin ETFs have posted net outflows nearly every trading session, with institutional selling signals persisting for over two weeks. “These sustained outflows continue to weigh on the market’s supply side, and there’s currently not enough observable buy-side demand to offset them,” Glassnode added, further widening the supply-demand imbalance risk. On the market front, Bitcoin faced short-term downward pressure Tuesday amid geopolitical tensions: reports of a new round of U.S. military strikes targeting Iran—despite recent progress toward a peace agreement—triggered the dip. Bitcoin’s price dropped roughly 1%, briefly slipping from above $77,000 to around $76,500, though overall it remains within its four-month trading range. Jeff Ko, chief analyst at CoinEx, said while geopolitical events could spark short-term volatility, the market’s focus is likely fixed on potential U.S.-Iran reconciliation advances, keeping the broader crypto market in a holding pattern. Overall, the current Bitcoin market faces two key headwinds: first, continuous outflows from spot Bitcoin ETFs erode critical buying support, and second, geopolitical uncertainty amplifies short-term volatility risks. If institutional risk appetite doesn’t show marginal improvement, the risk index could climb further—investors should remain cautious of downside pressure from technical selling and shifting market sentiment.