According to Woofun AI, geopolitical tension in the Middle East is doubly negative due to the sharp rise in international oil prices, causing the price of Bitcoin (BTC) to fall below the $80,000 mark, even falling below the average purchase cost for spot ETF investors and corporate holders at one point. Digital asset investment and market making company DWF Labs conducted an in-depth analysis of this in the weekly market report “Eyes on the Market: At Cost Basis” released on the 26th local time, pointing out that although BLK.US (BLK.US) products are still favored by capital, Ethereum (ETH) ETFs have experienced capital outflows for four consecutive weeks, and the market structure is facing severe tests.
The details of price fluctuations reveal intense linkages between macro assets and the fragility of leveraged markets. Bitcoin briefly rose to $84,856 on the 21st, but almost all of its gains were recovered after just one day, falling to $79,107 during trading on the 24th, and the closing price for the 25th week was fixed at $80,386, down 1.98% from the previous week.
Meanwhile, the price of Ethereum fell 2.64% to $2,344. On the 22nd, the Nasdaq Composite Index fell 2.60%, triggering an overall sell-off of risky assets. The military conflict in the Middle East increased market pessimism: Saudi Arabia's energy facilities were attacked, and oil tankers near the Strait of Hormuz were damaged one after another, driving Brent crude oil to close at $116.72 per barrel on the 23rd, the highest closing price in about 6 months since April 29, with an increase of 4.93% during the week. In contrast, the price of gold fell 4.31% to $4,004. As Bitcoin falls below the $80,000 mark, buying costs for institutional investors became a key reference indicator.
Blockchain analysis company Glassnode estimates that the average purchase cost for Bitcoin spot ETF investors and companies that hold Bitcoin is about $80,200, and the transaction price of Bitcoin on the 24th was indeed lower than this value. Large-scale liquidation operations occurred in the leveraged market: during the Bitcoin rise from the 19th to the 21st, about $498.1 million of short positions were closed; in the falling market from the 22nd to the 24th, the amount of long positions closed reached 1.23 billion US dollars, accounting for 82% of the total closing amount during the same period. The Bitcoin Volatility Index BVIV rose from this week's low of 38.82 to 41.13 on the 25th. The size of open futures contracts was US$138.3 billion, down 1.2% from the previous period.
Data compiled by Woofun AI shows that this combination of leveraged liquidation and rising volatility has further amplified short-term downward pressure on the market.
An in-depth analysis of ETF capital flows revealed structural imbalances under surface net inflows. Although the US Bitcoin Spot ETF ended two consecutive weeks of net outflows, receiving a net inflow of $301.2 million last week, funds were highly concentrated on BlackRock's iShares Bitcoin Trust (IBIT), which attracted $565.7 million in capital inflows, while other Bitcoin ETFs had a total outflow of $264.5 million. Judging from the October cumulative data, IBIT achieved net capital inflows of 755.2 million US dollars, while the cumulative net outflow of other ETFs was 1 billion 68.7 million US dollars.
According to DWF Labs analysts, the inflow of ETF funds does not necessarily mean that the price of Bitcoin will rise. According to its research, in the past 15 trading days, whenever a large amount of capital flows into IBIT while other ETFs have outflows, Bitcoin declined by an average of 0.86% over the next 5 days. The company notes that ETF capital flows often only occur after price changes, rather than predicting price movements. The outflow of funds from Ethereum ETFs is even more obvious: the US Ethereum Spot ETF saw a net outflow of $220.7 million last week. This is the fourth consecutive week of net outflows, and the cumulative net outflow since September 28 has reached $1.22 billion.
This means that the cumulative net capital inflow from the beginning of this year to date has dropped from $1,622 million to $400.5 million, which is equivalent to about 75% of the net capital inflow received this year already flowing out. BlackRock's Ethereum ETF product, ETHA, has also seen no net capital inflows in the last 19 trading days, indicating the market's continued avoidance of Ethereum assets.
Market attention is turning to the US Federal Reserve System (Fed) monetary policy decisions and key calendar events. The probability that the Federal Reserve Open Market Committee (FOMC) will keep interest rates unchanged on the 28th is 95%, and the probability of interest rate hikes is 6%. Together, slightly more than 100% is the price difference of the predicted market Polymarket. The probability of interest rate hikes in October soared to 48% after the CPI was announced on the 14th, and continued to decline thereafter. The trend of companies holding bitcoins is also worth watching: Strategy (MSTR.US) not only purchased 267 additional bitcoins (costing $22.1 million), but also bought back the preferred stock STRC for $193.1 million. The company will face a shareholder vote related to STRC on the 28th.
This week, in addition to the FOMC interest rate decision on the 28th, preliminary US GDP data for the third quarter and the PCE price index for September will also be announced on the 29th. The company results of Coinbase (COIN.US) and Strategy will also be announced on the same day. DWF Labs also mentioned a case from the past: when the price of Bitcoin falls about 7% from its highest closing price in nearly 20 days, ETF capital flows tend to turn into a net outflow. The recovery in Bitcoin prices and ETF capital flows are seen as key factors in judging short-term market trends. If the price fails to effectively stabilize the institutional cost line, the risk of further pullback will increase significantly.