Bitcoin capitulation wave builds as ETF outflows, rate shocks hit crypto: analysts

Crypto markets are facing a deepening capitulation phase after Bitcoin slid below $90,000 on Tuesday, driven by a mix of hawkish rate repricing, heavy ETF outflows, and deteriorating liquidity conditions. Analysts say the move reflects a coordinated risk-off impulse that has cut across global markets ahead of key macro releases this week.

According to The Block’s price page, BTC recovered slightly to $91,200 after setting an intraday low of around $89,300. These price levels were last seen in April, marking a seven-month low for the largest cryptocurrency. Year-to-date totals have also turned negative.

Ethereum briefly slipped toward $3,000, while BNB and Solana moved lower to roughly $910 and $135, respectively. Total crypto market capitalization fell to $3.09 trillion, erasing several weeks of gradual rebuilding.

Macro repricing reignites risk aversion

The broad decline follows a series of warnings from experts about structural fragility in crypto’s liquidity profile. Earlier this month, data provider Kaiko reported that Bitcoin’s market depth dropped roughly 30% from this year’s peak, reducing the market’s ability to absorb large orders without sharp price swings.

A hawkish repricing in U.S. rate expectations has been the dominant catalyst behind the sell-off, according to multiple analyst takes shared with The Block. Recent Federal Reserve communications pushed markets away from expecting a December rate cut, with probabilities sliding toward the 50% zone on Polymarket and the CME FedWatch tool.

Even a marginal shift in rate expectations was enough to tighten financial conditions and prompt deleveraging of risk assets, said Timothy Misir, head of research at BRN.

"The macro impulse was unambiguously hawkish," Misir wrote. "Fed repricing wiped out expectations of a December cut as yields rose, and risk assets unwound sharply."

Odds for December rate cut | Image: Polymarket

Global risk sentiment deteriorated alongside crypto. Asian equities weakened on softer growth data, Europe opened defensively, and U.S. tech futures extended declines as investors reassessed positioning ahead of Nvidia’s earnings and U.S. employment data later this week.

"The global stock sell-off is gathering steam and developing the self-perpetuating quality of bearish markets," Kyle Rodda, senior financial market analyst at Capital.com, stated. He noted that Bitcoin remains the "barometer for risk appetite" and that its slide below key psychological levels is "an ominous signal" for broader financial markets.

ETF outflows intensify as liquidity thins

ETF redemptions compounded the downturn. According to The Block’s earlier reporting, Bitcoin and Ethereum spot ETFs posted a combined $437 million in outflows last week. Analysts described the break of $90,000 as a "significant psychological shift," noting that thin liquidity and concentrated leverage made the market more vulnerable to shocks.

CoinGlass data shows more than $1 billion in crypto liquidations over the last 24 hours, with long worth over $723 million alone.

Onchain flows show late-stage capitulation — but not a confirmed bottom

Several onchain indicators are now flashing capitulation signals, market experts surmised. Short-Term Holders, a cohort whose average cost basis sits near $94,000, have been aggressively offloading as price slips further below their entry range. Misir said 31,800 bitcoins were sent to exchanges at a realized loss, with approximately 148,000 BTC sold below $100,000, highlighting distress among newer entrants.

"Without ETF absorption, spot demand remains brittle," Misir added. "The tape shows capitulation — not yet a structural bottom, but textbook stress."

Still, spot buyers with long-duration horizons continue to accumulate despite the downturn. El Salvador added 1,098 BTC in the past week, bringing its holdings to 7,474 BTC worth roughly $685 million. Michael Saylor’s bitcoin treasury firm, Strategy, pushed its total to 649,870 BTC, valued at over $48 billion. "These flows don’t neutralize selling pressure in real time," Misir noted, "but they build latent structural support."

"The market is in the late stages of a capitulation cycle," Misir said. "Fear is high, liquidity is thin, and derivatives leverage continues to unwind."