Bitcoin enters extreme volatility – Why institutions refuse to back down

The crypto market is swinging hard between fear and extreme fear.

December came in hot, with Bitcoin [BTC] ripping +8%. However, the momentum rolled over almost instantly. Now HODLers are trying to figure out whether this is just a liquidity sweep or the start of a deeper trend breakdown.

Bulls completely lost the $90k support block, which basically shows how thin BTC‘s bid side is right now. And the volatility is echoed in BTC ETF flows, showing no sustained inflow trend, no real directional conviction. 

Source: SoSo Value

Notably, this is where the real divergence kicks in. 

In previous accumulation phases, BTC pullbacks were backed by solid ETF demand. As the chart shows, daily net inflows usually started around $500 million and eventually ramped to $1 billion as BTC pushed toward the top. 

But this cycle is a different story. Daily net flows are sitting at just $54.8 million, which signals how weak the current demand side really is. Given this setup, how are institutions positioning themselves to stay resilient?

Institutional pressure mounts as Bitcoin HODLers hesitate

Recent market FUD hasn’t spared Bitcoin’s heavyweight holders. 

MicroStrategy [MSTR] is the standout example here. Ever since it lost the $450 level back in mid-July, the stock has been stuck in a steady downtrend.

At press time, MSTR was trading around $178.

Notably, MSTR isn’t the only one under pressure. BlackRock has unloaded 26k BTC since October, marking its most aggressive sell phase on record.

In short, the recent FUD has put a strong share of institutions under stress.  

Source: TradingView (MSTR/USD)

The result? Bitcoin HODLers are basically stuck in indecision.

In this setup, the billions flowing out of BTC ETFs aren’t random. With weak bid support, slipping stock performance, and broad FUD, investors are clearly sitting on the sidelines instead of backing Bitcoin heavyweights.

The logic is simple: Unlike private HODLers, public firms feel the pressure much harder. As these BTC-heavy companies keep bleeding capital, the risk of a wider sell-off can’t be ignored. That’s why tracking their moves is critical.

Institutional strategies during Bitcoin swings

As volatility ramps up, all eyes are on the big leagues.

But recent moves suggest BTC heavyweights might be weathering the market chop more smoothly than many expect. Case in point: The National Bank of Canada just made a big splash.

In a strategic move, the $398 billion institution scooped up 1.47 million shares of MSTR, worth about $273 million, boosting its BTC treasury exposure and showing confidence in navigating the turbulent market.

Source: SoSo Value

Notably, BlackRock isn’t far behind.

A prominent analyst recently highlighted that BlackRock’s IBIT generated $245 million in revenue despite $2.7 billion in outflows over five weeks, clearly showing how the firm is capitalizing on market swings.

Why does this matter? Sustained revenue lets BlackRock keep scaling positions. In short, despite the Bitcoin crash, its heavyweights are strategizing, showing they are navigating Bitcoin volatility strategically.

Final Thoughts

• Bitcoin daily net flows are just $54.8 million, signaling muted demand and leaving HODLers stuck in indecision while institutional pressure mounts.
• Despite market FUD, heavyweights are scaling positions, generating revenue, and positioning themselves to weather Bitcoin swings.