Bitcoin Struggles in October: What's Causing the Weakness?

Bitcoin (CRYPTO: BTC) is showing weakness after its run to $87,000, with futures traders and ETF withdrawals driving the selloff, even as fresh money kept flowing in.

Why Bitcoin Pulled Back

Glassnode wrote in its Oct. 12 Weekly Market Pulse that Bitcoin briefly dipped below $81,000 Thursday before a weekend rebound trimmed the loss. 

Momentum cooled sharply, with the 14-day RSI falling from 57.80 to 44.92, confirming buyers had lost control heading into the weekend.

Two signals drove the pullback:

1. Perpetual futures traders turned sharply bearish as traders opened fresh short positions rather than closing out existing longs.
2. Spot ETFs mirrored that shift on the institutional side, with weekly flows flipping from $117.95 million in inflows to $701.57 million in outflows—a 695% reversal. Glassnode links that swing to institutional investors turning more risk-averse and locking in profits.

Why Capital Is Still Flowing In

Despite the pullback, Glassnode’s capital-flow indicators moved higher, not lower:

• Monthly realized-cap growth rose to 1.23% from 1.14%, meaning coins are getting revalued at higher prices as new money enters the market
• Hot capital share climbed to 20.26% from 19.56%, above its statistical band, showing more short-term, price-sensitive money flowing in
• Short-term holder supply ratio rose to 14.52%, reflecting a growing share of coins held by newer buyers