Bitcoin falls below $110,000 as long-term holders sell and ETF inflows slow

Bitcoin slipped below $110,000 on Thursday, hitting its lowest level in more than three weeks after a wave of profit-taking by long-term holders and signs that spot ETF inflows have cooled. 

The slide erased billions in market value and forced a sharp unwind of leveraged bullish bets across derivatives markets. The move underscores the fragile market structure after weeks of frothy gains and heavy positioning by retail and institutional traders.

The asset is facing pressure from traders’ rising risk aversion, particularly amid concerns about a potential US government shutdown. 

A memo from the US Office of Management and Budget (OMB) instructed government agencies to revise plans ahead of a possible discretionary funding lapse on Oct. 1, as first reported by Politico.

The intraday drop took Bitcoin under $109,000 at one point. Traders pointed to a mix of on-chain activity and fund flows as the immediate causes. 

On-chain analytics firm Glassnode reported that long-term holders have realised roughly 3.4 million BTC in profits during the recent run. That volume of distribution is notable because similar realisations have preceded past tops and pauses in momentum.

Derivatives desks said the price dipped quickly and cascaded into forced selling. Data aggregators showed roughly $275–$280 million in Bitcoin-related liquidations as longs were flushed out of leveraged positions during the drop. 

That liquidation wave compounded selling pressure and widened the move into altcoins and broader risk assets. Market trackers logged the bulk of the forced exits in perpetual futures and options hedges.

The sell-off dragged the total crypto market capitalisation down to roughly $3.76 trillion, wiping about 4% off market value in a single day. The dip erased a portion of the recent gains that had pushed the market back toward record territory just weeks earlier.

That broad contraction reflected pressure across major tokens and underscored how Bitcoin’s moves still ripple through the entire digital-asset complex. Equity-like tokens, layer-one platforms and leveraged products all lost ground as volume surged on the downside.

Slow ETF demand for Bitcoin 

The timing was notable. Options traders were preparing for a large monthly expiry later on Friday, and some market participants expect that volatility around expiries can amplify moves in the spot market. With fewer ETF buyers soaking up newly offered supply, the market had less depth to absorb the long-term holders’ sales. That mismatch left leveraged lengths exposed. 

Also read: These 3 Kaduna-based founders are reimagining everyday Bitcoin use in Africa

Exchange-traded funds that poured money into Bitcoin in recent weeks have shown signs of cooling. Several data providers and on-chain analysts reported a deceleration in ETF net inflows after the Federal Reserve’s latest policy turn. 

That softening of institutional demand matters because ETFs had been a key buyer of newly offered supply and a stabiliser for prices. With that buffer thinning, realised sales by seasoned holders had a bigger market impact than in earlier pullbacks.

Long-term holders have a variety of motives to take profits. Many lifted holdings that had accrued substantial unrealised gains after a sustained rally. Some long holders also rebalanced into fiat or other assets amid macro uncertainty. 

Glassnode’s data suggests that the amount of BTC realised by long holders in this circle is historically large, which helps explain why on-chain supply reached the market in such volume. That supply was only partially soaked up by institutional demand, given the slowdown in ETF purchases.

This episode is another reminder that Bitcoin markets are still susceptible to sharp moves when heavy leverage and concentrated positioning meet a pause in fresh buying. 

For longer-term investors the fundamentals remain unchanged in the near term: Bitcoin’s supply schedule and institutional access through ETFs persist. For traders, risk management matters more than ever. The liquidations show that even a relatively small percentage move can cascade when leverage is large.

The bottom line remains: a notable profit-taking event by long-term holders and a slowdown in ETF flows tipped a finely balanced market. That produced about $275–$280 million in leveraged liquidations and pulled the crypto market cap down by roughly 4 per cent in a single day, while Bitcoin tested its lowest prices in over three weeks.