Saylor pours $800M in, yet BTC falls: paradox or norm?

The Fear & Greed Index fell to 15, signaling extreme fear among investors. Retail investors are dumping positions en masse while watching a 30% correction from October’s all-time high.

Meanwhile, as the crowd panics, major market players conducted one of the most aggressive accumulation weeks of 2025. Over the past seven days alone, Strategy under Michael Saylor accumulated over $800 million in Bitcoin, while El Salvador acquired more than 1,000 BTC worth over $100 million – sharply accelerating its usual DCA strategy of one bitcoin per day. Anchorage Digital received 4,094 BTC worth $405 million from Coinbase, Cumberland, Galaxy Digital, and Wintermute in just nine hours – the largest institutional flow in a month.

Total institutional buying exceeded $1.3 billion during the week on a falling market. Retail investors look at these figures and ask the obvious question: how can prices fall when such volumes of capital enter the asset?

A combination of factors caused the market to pull back

Tracy Shuchart, Senior Economist at NinjaTrader, explains the mechanics this way:

The reason nobody is sure why BTC is pulling back is because everyone is looking for a single cause when this is actually a systems failure with multiple transmission mechanisms reinforcing each other.

In her view, Bitcoin ran from $40,000 to $126,000 in a year (a 215% rally) on two specific narratives: a Federal Reserve easing cycle plus institutional adoption through ETFs. The futures market accumulated $94 billion in open interest. Some platforms offered leverage ratios as high as 1,001:1.

“That setup alone created extraordinary fragility,” Shuchart notes.

The trigger was a sharp reversal in Fed rhetoric. Central bank officials completely reversed the dovish expectations dominating the market. The probability of December rate cuts fell from 90% to 40% within days. Real yields on short-term Treasuries stayed above 5%.

“The entire macro story that justified Bitcoin at $126,000 collapsed in a matter of weeks,” Shuchart states.

ETFs as institutional exit liquidity mechanism

The new ETF infrastructure that markets celebrated as bringing institutional money simultaneously created institutional-scale exit liquidity that never existed before: portfolio managers gained the ability to exit with one click.

When the macro narrative broke, they used it extensively: $1.1 billion flowed out of Bitcoin ETFs in the first days after the Fed rhetoric reversal. The following week saw another $1.7 billion in outflows. Ethereum ETFs lost $1.4 billion. Total ETF infrastructure outflows reached $4.2 billion.

This isn’t retail panic selling, – Shuchart emphasizes. This is professional portfolio managers rebalancing away from an asset whose fundamental thesis just evaporated.

Long-term holder profit-taking

Parallel to institutional outflows, long-term holders who bought bitcoin in the $40,000-$80,000 range began massive profit-taking. 815,000 BTC were sold over thirty days. At an average realized price around $100,000, this represents $81.5 billion in sales. What’s the logic of these holders?

They’re selling not because they think Bitcoin is worthless. They’re selling because they see volatility ahead and they’re sitting on 50-150% profits. Smart money doesn’t ride drawdowns when they can step aside and rebuy lower with the same capital,

– Shuchart explains.

When price broke the psychological $100,000 support level, technical stops triggered across the entire derivatives complex. Over $20 billion in leveraged positions were liquidated throughout October and November. Individual daily liquidations reached $3.2 billion. Open interest collapsed from $94 billion to $68 billion, creating a classic deleveraging cascade.

Arthur Hayes: liquidity crisis, not fundamental problem

Arthur Hayes, BitMEX founder and one of the most influential crypto market analysts, confirms the systemic nature of the correction in his latest essay. Hayes argues that the current BTC decline isn’t related to fundamental problems with the asset itself but is driven by reduced system liquidity.

“Flows into ETFs and DATs (Digital Asset Treasuries) have sharply weakened,” Hayes writes. The institutional money that drove the market higher in the first half of the year has temporarily dried up. But the reason isn’t loss of faith in Bitcoin as an asset – it’s changing macroeconomic conditions.

Hayes estimates Bitcoin could drop to $80,000 in the process of technical market clearing from excessive leverage. However, with liquidity returning and improved US stock market conditions, he sees potential for growth to $250,000 by the end of 2025.

Fundamentally Bitcoin is fine. This is technical deleveraging plus temporary liquidity drought, not structural collapse,

– Hayes emphasizes.

The math of imbalance

Why don’t $1.3 billion in institutional purchases stop the decline? Over the past month, sales totaled:

• From long-term holders: $81.5 billion (815,000 BTC) 
• ETF outflows: $4.2 billion Liquidations: $20 billion
• Total: over $105 billion in sales pressure.

For every dollar of buying, there were roughly 80 dollars of selling pressure. When we see headlines “Saylor bought $800 million” and interpret it as a bottom signal, we often don’t see the tens of billions on the opposite side of the market.

Different players think in different timeframes

Strategy under Saylor operates on a 10+ year horizon with target prices of $200,000-$500,000 per coin. The current $90,000 price represents a 55% discount from the company’s minimum long-term target. Saylor doesn’t follow Bitcoin’s four-year cycles and buys strategically, often regardless of current market conditions.

El Salvador is building a national Bitcoin treasury as a sovereign reserve. The country’s DCA strategy isn’t sensitive to short-term price fluctuations. The government uses the decline for aggressive reserve strengthening, thinking in decades, not quarters.

Anchorage Digital makes custodial purchases for institutional clients. This is long-term capital placement, not speculative positions. These institutional players aren’t trading – they’re accumulating.

Retail looks at seven-day charts and panics. Institutions look at ten-year horizons and buy at a discount. This explains the paradox of simultaneous buying and price decline.

Where experts see the market bottom forming

Tracy Shuchart and Arthur Hayes agree on the target zone for technical bottom: $80,000-$84,000.

Shuchart describes three conditions that must be met for a sustainable bottom to form.

1. The market must fully clear remaining leverage.
2. Open interest must fall to “healthy” levels of $50-60 billion (from current $68 billion). The market needs prices where long-term holders transition from distribution back to accumulation. For example, in the $80,000-$84,000 zone, holders with a $40,000-$60,000 cost basis will likely stay in positions rather than sell.
3. Finally, price must find a level where real buyers with actual capital see value worth the volatility risk.

Hayes sees a scenario for growth to $250,000 by year-end under two conditions:

1. Liquidity return through resumed Fed quantitative easing (simply put – turning on the printer and printing new money), or at least pausing hawkish policy.
2. US stock market stabilization with the end of tech and AI stock corrections.

What’s affecting liquidity

The US government shutdown created a fiscal surplus of $198 billion in September, removing significant liquidity from markets. Analysts note this as “one of the driest periods in months, if not years.”

Bitcoin correlates strongly with tech stocks. Falling AI company stocks amid concerns about astronomical AI spending creates additional pressure on the crypto market. Investors, fearing an “AI bubble,” exit both sectors simultaneously, amplifying downward momentum.

Evaporation of paper profits

The $600 billion market cap loss primarily represents evaporation of unrealized profits. When BTC grew from $40,000 to $126,000, it added about $1.7 trillion to the asset’s market cap. A significant portion of this growth was pure multiple expansion based on the macro narrative of Fed rate cuts and institutional flows through ETFs.

Now the market re-prices based on reality: high real yields, absence of monetary policy easing, strong dollar environment.

A 25% correction after a 215% rally with 1,000x leverage in the system is normal market behavior when the fundamental story changes. This isn’t mysterious. It’s textbook deleveraging dynamics in an asset with no cash flows to anchor valuation, extreme leverage ratios, and a macro thesis that broke,

– Shuchart explains.

The violence of the price movement reflects the amount of accumulated leverage in the system, not any change in Bitcoin’s long-term prospects as an asset.

When the crowd completes capitulation and the market clears excess leverage, smart money will remain the dominant force on the demand side. At that point, the next growth cycle may begin. But for this to happen, the market must first find technical bottom through complete clearing of speculative positions.