Bitcoin Plummets $10K in Just 7 Days as ETF Hype Fizzles

Bitcoin's brutal selloff accelerates as institutional interest wanes.

The ETF Mirage Fades

Spot Bitcoin ETFs—once hailed as the holy grail of mainstream adoption—are seeing demand evaporate faster than a meme coin's utility. That $10,000 drop isn't just a correction; it's a reality check for Wall Street's flavor-of-the-month product.

No Safety Net

When the so-called 'smart money' pulls back, retail gets left holding the bag—again. The numbers don't lie: ten thousand dollars in seven days screams institutional cold feet.

Wake-Up Call

Turns out, financialized Bitcoin behaves like, well, every other financial asset—volatile and merciless. Who could've predicted that? (Besides everyone who lived through 2018, 2021...)

Bitcoin Demand Weakens After All-Time High

Julio Moreno, head of research at on-chain analytics platform CryptoQuant, pointed out in a recent analysis that Bitcoin’s latest price action reflects a cooling of demand.

“Bitcoin’s overall demand growth slowdown, including purchases from ETFs and strategic buyers, is behind the current price pause and correction,” Moreno wrote on X (formerly Twitter).

The observation is consistent with on-chain data, which shows declining activity across wallets and addresses. Moreno stressed that the downturn is structural rather than isolated, meaning the drop is not due to a single entity such as MicroStrategy selling or one ETF facing outflows. Instead, demand has weakened across multiple market layers simultaneously.

ETFs Flip From Inflows to Outflows

A closer look at ETF flows supports this assessment. After a sluggish start in early August, U.S. spot Bitcoin ETFs experienced seven straight days of net inflows beginning on August 6, fueling Optimism and helping Bitcoin reach an all-time high near $124,000.

But sentiment shifted on Thursday, August 14, after the U.S. Bureau of Labor Statistics released the July Producer Price Index (PPI) report, which showed inflation rising faster than expected. The report triggered renewed concerns about the Federal Reserve’s monetary policy outlook and erased hopes of aggressive rate cuts this year.

That same day, ETF demand reversed into net outflows, according to data from SoSo Value. Although the actual outflow numbers were modest, Bitcoin’s price fell sharply in response—signaling fragile sentiment and overextended positioning.

On August, for instance, when Bitcoin traded at roughly the same level as today, U.S. spot ETFs saw $812 million in net outflows, following a disappointing U.S. jobs report. The coincidence between ETF flows and price corrections has become increasingly evident in recent weeks.

On-Chain Metrics Confirm Demand Collapse

Beyond ETFs, on-chain demand signals have also deteriorated rapidly. CryptoQuant’s Apparent Demand metric, which tracks new investments entering the bitcoin market, shows that demand has halved in just three weeks.

This sharp drop in demand suggests that the correction is not a typical short-term pullback but a sign of waning conviction among both retail and institutional investors.

“While Bitcoin’s price surged and then returned to its starting point over the past 15 days, market demand essentially dropped by half,” Moreno explained. “If sentiment doesn’t recover soon, further corrections are likely.”

Macro Catalysts Will Decide Bitcoin’s Next Move

With Bitcoin struggling to hold support levels, many analysts argue that a macroeconomic catalyst will be needed to reignite demand.

The most likely candidate is the Federal Reserve’s upcoming decision on interest rates. According to the CME FedWatch Tool, traders now see an 86% probability of a 25 basis point rate cut at the September FOMC meeting. However, expectations have moderated compared to last week, when markets were pricing in three rate cuts in 2025 and a 98% probability of a September cut.

The downgrade in expectations has weighed heavily on speculative assets, including cryptocurrencies. If the Fed signals more accommodative policies at Jackson Hole or later this year, Bitcoin could quickly rebound as fresh capital flows back into ETFs and exchanges.

Market Outlook: Caution in the Short Term

For now, Bitcoin appears trapped between strong selling pressure from profit-takers and hesitant demand from new buyers. The return to early August price levels underscores how fragile the rally was, fueled more by expectations of monetary easing than by organic adoption growth.

Still, many analysts see the correction as a healthy reset rather than the start of a prolonged bear phase.

• Large-scale holders, or whales, have yet to show signs of panic selling.

• Bitcoin’s long-term supply dynamics, including halving-driven scarcity, remain intact.

• Institutional interest in ETFs continues to build, even if short-term flows remain choppy.

If Bitcoin manages to hold current support levels, it could stabilize around the $112,000–$115,000 range before attempting another push higher. But if demand metrics continue sliding, a deeper pullback below $110,000 cannot be ruled out.

Conclusion

Bitcoin’s $10K plunge in just one week highlights how sensitive the market has become to shifts in demand and macroeconomic sentiment. While ETFs and whales remain important drivers, the broader picture shows a slowdown across all investor categories.

With the Federal Reserve set to play a decisive role in shaping market expectations for the rest of 2025, Bitcoin’s near-term trajectory may hinge less on crypto-native factors and more on interest rate policy, inflation data, and institutional flows. Until then, traders should brace for heightened volatility and prepare for both deeper corrections or sharp rebounds, depending on how demand evolves.