Bitcoin’s $11B ETF Surge Fails to Break $110K – What’s Holding BTC Back?

Wall Street's crypto love affair hits a snag as Bitcoin ETFs pour $11 billion into the market—yet price action stalls below the psychological $110K barrier. Here's why the king coin isn't dancing to institutional tunes.

The liquidity paradox

More money doesn't always mean higher prices when miners and long-term holders treat ETFs like exit liquidity. The market's absorbing supply faster than you can say 'number go up.'

Derivatives dampening the party

Futures open interest at record highs suggests traders are hedging rather than FOMOing—a sobering contrast to 2021's leverage frenzy. The smart money's playing defense.

Regulatory headwinds

SEC Chair's latest 'protective' crusade against staking has institutions hitting pause. Nothing like government guardianship to kill a bull run's vibe.

For all the ETF fanfare, Bitcoin remains its rebellious self—refusing to moon when Wall Street snaps its fingers. Maybe decentralized money shouldn't trade like a tech stock after all. (Then again, when has finance ever let logic get in the way of a good narrative?)

Source: Glassnode

In fact, last week alone, ETFs bought 20.7K BTC or about 12.6% of the annual new bitcoin (mined) supply.

But what do other on-chain data say about the divergence between this high demand and price? 

Long-term holders are still offloading

Explaining the disconnect, Charles Edwards, founder of macro hedge fund Capriole Investment, linked the pressure to long-term holders (LTH).

He stated, 

“It’s because Bitcoin OGs (long-term holders) have been dumping on Wall St since the ETF launch in January 2024, unloading their positions.”

Source: Charles Edwards/X

Per the attached chart, 6-month holders (blue line) have absorbed (spiked) in the past two months, while LTH dumped (+2 years holders, red line). 

However, others claimed that some massive buys are being carried out via OTC (Over the Counter) desks.

As a result, they rarely reflect on traditional order books or CEXs (centralized exchanges). This reduces the potential impact of such moves on the price, noted TXMC Trades. 

“An increasing amount of older coins are being reactivated, but they are not making their way into the order books. They are being transacted OTC to supply large buyers like the ETFs, and these actions do not affect the price in the same way.” 

Even so, supply on OTC desks and reserves on centralized exchanges have dropped 20-30% since 2024. This could set BTC up for a squeeze higher. 

However, the offloading from LTH appeared plausible. Earlier in June, analyst Willy WOO stated that those with 10K-100K BTC and who bought BTC at $0-$800 have been dumping since 2017. 

“The big whales >10k BTC have been selling since 2017. ‘They’re stupid!’ Most of those coins were bought between $0-$700 and held 8-16 years.”

Additionally, the number of whales with over 1K BTC reduced from late May, from 2,114 to 2,008, before recovering in the last week of June. This change coincided with the $111K peak in May, underscoring the whale pressure. 

Source: Glassnode

In fact, retail interest also dropped 10% during this period, further capping the BTC breakout prospect. Still, VC Chamath Palihapitiya projected BTC could hit $500K by October, citing a historical post-halving rally pattern.