Behind BTC's Violent Weekend Swings: Retail Investors Exit, While Long-Term Funds Are Buying In

[BlockBeats] Over the weekend, BTC went crazy again, swinging back and forth between $88,000 and $92,000. ETH was even more dramatic, surging directly from $2,910 to $3,150. Honestly, liquidity is always poor at this time of year, so even a small amount of capital moving in or out can turn the market upside down.

But despite the intense volatility, the liquidation volume wasn’t as big as you might expect. What does this mean? It shows that both participation enthusiasm and position sizes have been declining this quarter. Just look at the data—BTC and ETH perpetual futures open interest has dropped 40-50% from the highs in October, and retail sentiment has basically returned to bear market levels.

What’s interesting is the supply side. Over the past two weeks, around 25,000 BTC have been withdrawn from exchanges, and the amount of coins held by ETFs and corporate buyers has, for the first time in history, surpassed exchange reserves. ETH exchange reserves have dropped to their lowest in ten years. Retail investors are withdrawing, but long-term funds are quietly accumulating.

Now, everyone is watching Wednesday’s Fed meeting. A 25-basis-point rate cut is almost a sure thing, but the key is what they say about the balance sheet, which will directly determine where risk assets head toward year-end. BTC is now stuck in a $84,000 to $100,000 range, order book depth is getting thinner, and with the holidays approaching—whichever way it breaks out, the next main trend could be coming.