Spot BTC ETFs See $175M Outflow, Analyst Says Price Could Drop to $40K

US spot Bitcoin ETFs saw a significant net outflow of $175 million, extending a series of withdrawals during a usually quiet holiday trading period. This comes as investors prepare for $23 billion in Bitcoin options expiring on Friday, amid increasing negative sentiment from market analysts.

ETF Outflows Reflect Institutional Caution

Farside Investors reported that Wednesday marked the fifth day in a row of net outflows from spot Bitcoin ETFs, totaling $175.3 million. This trend suggests institutional investors may be cautious about holding large positions amid ongoing market volatility and the lack of immediate bullish drivers.

BlackRock’s iShares Bitcoin Trust (IBIT) led the withdrawals with $91.4 million, after $157.3 million the day before. Grayscale’s GBTC and Fidelity’s FBTC also saw outflows of $24.6 million and $17.2 million. Other funds from Bitwise, Ark 21Shares, VanEck, and Franklin Templeton also lost money, showing a market-wide adjustment.

Overall, ETF assets have fallen from $62.7 billion to $56.8 billion this month. Analysts note that seasonal factors like tax-loss harvesting, lower liquidity near year-end, and preparation for the $23 billion options expiry on Deribit and IBIT are influencing this shift.

Price Pressure and Market Sentiment

Bitcoin’s price continues to face pressure as implied volatility narrows and leverage diminishes. Risk-averse sentiment has been rising since the October crypto market fall, and recent gold gains and ETF outflows have added to this trend. Similar patterns were seen last December, when large outflows happened before the holidays.

Traders are considering multiple factors. While some see room for a rebound, many analysts warn of potential downside. According to 10x Research, a lack of strong catalysts and the expectation that the Federal Reserve will be less accommodative are limiting the chances of immediate upside. BTC’s pressure is also evident in trading volume, which fell 36% in the past 24 hours, reflecting a cautious market mood.

Analyst Predictions Point to Lower Levels

Some analysts suggest that Bitcoin may be due for a deeper pullback. Peter Brandt and Fundstrat’s Tom Lee see the price falling to about $60K, while crypto analyst Ali Martinez notes that BTC often declines close to 60% after slipping below its 50-week moving average. Martinez expects Bitcoin could test $40K if past patterns hold.

According to @_FORAB, Tom Lee's fund, Fundstrat, stated in its latest 2026 cryptocurrency strategy advice to internal clients that a significant correction is expected in the first half of the year, completely contradicting Tom Lee's public statements.

The internal report sets… pic.twitter.com/HbRoNzr85z

— Wu Blockchain (@WuBlockchain) December 20, 2025

Other experts, like Cheds Trading, expect a bottom between $35K and $45K. They consider extreme predictions, such as Bloomberg strategist Mike McGlone’s $10K target, unlikely. Analysts say uncertainty in the economy, losses among short-term holders, and risk-averse sentiment are driving these forecasts.

A Path Toward $10,000 Bitcoin -
“We buy Bitcoin with money we can’t afford to lose.” Michael Saylor, at the Economic Club of Miami event last evening.
I admire and respect Mr. Saylor, and it was his arrival in 2020 -- when Bitcoin traded near $10,000 -- that helped fuel the 10x… pic.twitter.com/0CDBxCZYYc

— Mike McGlone (@mikemcglone11) December 16, 2025

Bitcoin is trading at $87,582, with intraday highs of $87,956 and lows of $86,411. Some traders hope for a year-end rally, but the market looks ready for more ups and downs, and institutional investors are cautious.

What Should Investors Consider?

The recent outflows from US spot Bitcoin ETFs highlight a careful approach by institutional investors amid year-end market swings. Seasonal effects and upcoming options expiries are keeping trading muted.

Experts suggest that Bitcoin may experience more downward pressure, with support between $35K and $45K. A few traders hope for a late-year rise, but most remain cautious, suggesting volatility will persist.