Bitcoin’s ETF Hangover: Why Crypto Bulls Are Stuck Below Water as Profitable Supply Plunges

The post-election 'Trump Pump' in Bitcoin is now a distant memory, replaced by a hangover that just won’t quit. Over the weekend, $BTC crashed to $74,500, sending shockwaves through a market already nursing wounds from one of the largest ETF outflow periods on record. The price is now trading below the average entry price of US spot ETF investors, and the profitable supply has cratered to cycle lows. If you’re still bullish, you’re either a true believer or you haven’t checked your P&L lately.

The facts are brutal. Bitcoin’s price action over the past 72 hours has been a masterclass in how quickly sentiment can sour. The initial catalyst was a sudden escalation in geopolitical tensions, which sent the US dollar ripping higher and left risk assets scrambling for cover. According to Coinpedia, $BTC fell sharply to $74,500 before finding some footing. But the damage was done. ETF investors, already on edge after a record outflow, are now underwater. According to AMBCrypto, Bitcoin is trading below the average ETF cost basis, meaning a majority of institutional buyers are sitting on losses.

The narrative has shifted from euphoria to despair. The 'Trump Pump', the post-election rally that saw Bitcoin surge on hopes of regulatory clarity and institutional inflows, is now almost fully retraced. Benzinga reports that the sell-the-news dynamic has taken hold, with even the most ardent bulls questioning their conviction. Meanwhile, BitMine, one of the largest Ethereum miners, is staring at a $6.6 billion paper loss. That’s not just a crypto problem, it’s a signal that liquidity is drying up across the board.

The broader context is ugly. Crypto markets are now in a classic reset phase. The ETF trade, once the holy grail for institutional adoption, has turned into a millstone. Outflows have accelerated, and the profitable supply, coins held at a profit, has fallen to its lowest level in years. This is not just a technical correction. It’s a structural shift in market psychology. The dream of Bitcoin as a portfolio diversifier is colliding with the reality of macro headwinds and regulatory uncertainty.

Cross-asset correlations are breaking down. Bitcoin is no longer trading as a risk-on asset. Instead, it’s behaving like a wounded animal, limping along as traders reassess their exposure. The US dollar’s rally has added insult to injury, squeezing crypto liquidity and forcing leveraged players to unwind. The technicals are a mess. Support levels are being sliced through like butter, and every bounce is met with fresh selling. The market is now in full risk-off mode.

The analysis is straightforward. The ETF narrative is dead, at least for now. Institutional buyers are trapped, and retail is nowhere to be found. The profitable supply metric is the canary in the coal mine. When the majority of coins are held at a loss, forced selling is not far behind. The only thing keeping Bitcoin from a deeper collapse is the hope that a new catalyst, regulatory clarity, a Fed pivot, or a geopolitical de-escalation, will emerge. But hope is not a strategy.

Strykr Watch

The key level for $BTC is $74,500. That’s the last line of defense. Below that, the next stop is $70,000, where a cascade of liquidations could trigger a full-blown capitulation. On the upside, resistance sits at $78,000. If Bitcoin can reclaim that level, it could spark a short-covering rally. But the real battle is psychological. As long as ETF investors are underwater, every rally will be sold. The RSI is deep in oversold territory, but momentum is still negative. The market needs a catalyst, and fast.

The risks are obvious. If $BTC breaks below $74,500, the floodgates could open. Forced liquidations, margin calls, and a loss of confidence could send the price tumbling toward $70,000 or even lower. The macro backdrop is also a risk. If the US dollar continues to strengthen, crypto liquidity will remain under pressure. Regulatory uncertainty is another wildcard. If the SEC or other regulators tighten the screws, the ETF trade could go from bad to worse.

But there are still opportunities. If you’re a long-term believer, this is the kind of pain that creates generational buying opportunities. Look for entries near $72,000 with tight stops. If $BTC can reclaim $78,000 on volume, that’s your signal to add. On the short side, a break below $74,500 opens the door to a quick move lower. Stay nimble, manage your risk, and don’t fall in love with your position.

Strykr Take

Bitcoin is in a reset phase, and the ETF narrative is officially dead money. The market is punishing late longs and rewarding patience. If you’re still bullish, wait for a clear signal. If you’re bearish, don’t get greedy, the pain trade is lower, but forced selling can reverse fast. Strykr Pulse 38/100. Threat Level 4/5. This is a market for disciplined traders, not dreamers.