Bitcoin has recently experienced a significant sell-off, coinciding with increased on-chain activity related to BlackRock’s spot Bitcoin exchange-traded fund (ETF), known as IBIT. Analysis of blockchain data reveals a notable uptick in large transfers to Coinbase Prime, indicating a rise in ETF redemptions.
Recent figures from Arkham show that at least eight transfers linked to IBIT, totaling approximately 2,268 BTC, were directed to Coinbase Prime within a short time span. This activity followed a period of intense market pressure, during which Bitcoin’s price plummeted from the mid-$80,000s to the high-$60,000s. Following this decline, Bitcoin attempted a slight recovery around the $70,000 mark.
Examining the weekly ETF data sheds light on the context for this on-chain activity. For the week ending February 6, BlackRock’s Bitcoin ETF recorded net outflows amounting to $115.14 million, translating to approximately 1,600 to 1,700 BTC in redemptions based on prevailing market prices. Although the amount of BTC transferred to Coinbase Prime exceeded this net outflow, this discrepancy aligns with typical gross settlement flows, temporary staging processes, and operational buffers.
It’s crucial to note that the transfers to Coinbase Prime do not imply immediate market selling. This platform serves as the custody and execution layer for ETF creations and redemptions, meaning that Bitcoin often moves to Coinbase Prime as part of regular settlement procedures before any final decisions are made regarding the assets.
Bitcoin’s price movements throughout this period suggest that the selling pressure is driven more by liquidation mechanics rather than voluntary market selling. The sell-off was rapid and steep, marked by a significant rise in trading volumes—a strong indicator of liquidation events. Momentum indicators during this time displayed pressure, with the daily relative strength index falling into oversold territory and stabilizing below neutral levels.
The subsequent bounce in Bitcoin’s price towards the $70,000 mark did not exhibit strong follow-through, leading analysts to view this as a relief rally rather than a definitive trend reversal. In light of this context, the observed ETF outflows seem to corroborate existing downward price pressure rather than functioning as a trigger for the downturn.
In summary, the sequence of events appears clear: initial price stress and liquidations were followed by ETF redemptions, with Bitcoin routed to Coinbase Prime for standard settlement processes. There is currently no evidence suggesting that BlackRock engaged in any unusual or discretionary selling outside the normal ETF operations.
As market volatility continues, ETF flows and associated on-chain movements are expected to remain highly responsive to price fluctuations, indicating that the activity observed is driven by settlement processes rather than reflecting a fundamental change in long-term institutional sentiment. The latest data suggests that while BlackRock-linked transfers to Coinbase Prime coincide with settlement activities during a market correction, the ETF outflows reinforce existing price weaknesses rather than signaling a recovery or bottom.
