DWF Labs: Bitcoin ETF Fund Flows Show Clear Trend of Chasing Gains and Cutting Losses

DWF Labs released a research report indicating that the daily fund flows of the U.S. spot Bitcoin ETF are not a reliable indicator for predicting BTC price movements, as investors tend to chase gains and cut losses. The study reviewed 694 trading days since the ETF's launch in January 2024 and found that in 8 instances where Bitcoin prices fell by at least 15%, there were outflows in 7 cases; conversely, all 9 instances of equivalent price increases recorded net inflows. The data shows that the correlation coefficient between the day's ETF fund flow and the BTC price trend over the past 5 trading days is 0.54, while the correlation with the price trend over the next 5 days is only 0.03. The report concludes that "ETF fund flows confirm trends rather than predict them." In terms of specific fund movements, the most severe outflows occurred during the last two major declines. From October 2025 to February 2026, investors withdrew a net of $6.9 billion, followed by an outflow of $8.2 billion during the subsequent decline in May to June. DWF noted that the data cannot distinguish whether the sell-offs came from institutions or retail investors, and it estimates that about one-fifth of the fund flows may belong to hedging trades that shorted through CME futures while buying ETF shares. Additionally, the report found that since the ETF's launch, Bitcoin has experienced approximately 3 sell-offs of over 15% each year, down from about 4 times in 2022 to 2023 and 8 times in 2021. The sell-off process has become smoother, with a median decline of 21.3%, compared to 19.4% during the same period in 2022 to 2023. This change cannot be entirely attributed to the ETF, as volatility and the frequency of sell-offs began to decline before the ETF's launch in 2024.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.