Bitcoin funds shed $465 million over two sessions last week even as broader U.S. liquidity kept expanding to $5.92 trillion, leaving the asset locked in a tight $63,700-to-$65,500 range. The mismatch points to a leverage flush rather than a change in investor conviction.
Key Takeaways
U.S. spot bitcoin ETFs lost $465 million over a 48 hour stretch last week, snapping a seven-day inflow streak.U.S. net liquidity climbed to $5.92 trillion even as the Federal Reserve’s reverse repo buffer nears zero.Ethra Invest’s Saeed Al-Marri says longs are being liquidated six-to-one, with the August 12 CPI print next.Moreover, it bears mentioning that U.S. spot bitcoin ETFs have shed more than 160,000 BTC since their October 2025 peak, the largest annual drawdown since the products launched in January 2024.
Leverage, Not an Exit, Behind the Drop“Right now, longs are being liquidated six times as often as shorts (6 to 1), which tells you this is bullish bets getting wiped out, not a broad exit from the asset.”
The numbers back him up given that a mid-July drawdown wiped out $73.15 million in bitcoin positions in a single day, with $62.63 million of that coming from long traders against just $10.52 million in shorts, a roughly six-to-one split that matches Al-Marri’s read.
The macro picture complicates the bearish read even further since U.S. net liquidity, a measure of the cash available to flow into risk assets once the Federal Reserve’s balance sheet, the Treasury General Account and reverse repo (RRP) operations are netted out, has climbed to roughly $5.92 trillion, up more than 3% over the past 12 weeks.
Analysts who track the metric weekly put the current reading in the 80th percentile of every weekly observation since 2003, a level historically associated with looser, not tighter, financial conditions.
The reverse repo facility, once a buffer that could absorb trillions in excess cash, has nearly emptied out. Overnight RRP volumes have fallen to a few hundred million dollars in recent operations, a fraction of the $2.37 trillion peak the facility held in September 2022. With that cushion gone, additional liquidity now has nowhere to go but directly into markets, including bitcoin and other risk assets, rather than parking at the Fed overnight.
