Murphy Says Bitcoin ETF Outflows Reflect Weak Marginal Buying, Not Just Selling Pressure

On-chain analyst Murphy said the current cycle is different from past market phases because spot Bitcoin ETFs have brought large amounts of traditional institutional capital into the market. According to ChainCatcher, he said ETF net flows mainly record primary-market subscriptions and redemptions by authorized participants, and only become net inflows or outflows in the data when sustained secondary-market pressure pushes ETF prices away from net asset value beyond the arbitrage cost line. Murphy, citing Glassnode data, said January and February showed high trading volume with small net outflows, suggesting that although panic selling was visible, there was still strong buying support. He added that May through July showed low trading volume with large net outflows, which he said pointed less to stronger selling pressure and more to the absence of marginal buyers, causing ETFs to trade at a discount and triggering authorized participant redemptions. He said this stage may reflect a second institutional capitulation, typically a late-stage market-clearing pattern, and suggested it could present a new opportunity for retail investors. Murphy added that current data cannot determine how long the phase will last.