After October's steep decline, Bitcoin's recovery has been sluggish, with a critical factor emerging: institutional whales are stepping back.

The cryptocurrency is struggling to regain momentum as the forces that once propelled its surge fade. Following a dismal October, Bitcoin has only managed a shaky rebound, fluctuating around the $100,000 level before stalling.

This time, however, the rally lacks the strong tailwind that defined much of its 2025 trajectory: unwavering institutional confidence.

Over the past month, major buyers—from ETF allocators to corporate treasuries—have quietly withdrawn, stripping the market of the liquidity-driven support that helped the token reach record highs earlier this year. While their retreat hasn’t triggered industry-wide panic, it has upended market expectations.

For most of the year, institutional investors served as pillars of Bitcoin’s legitimacy and price stability. Bloomberg data shows spot Bitcoin ETFs attracted over $25 billion in inflows, pushing total assets under management to roughly $169 billion. Their steady allocations helped rebrand Bitcoin as a portfolio diversifier—a hedge against inflation, currency devaluation, and political turmoil.

Yet this narrative, always somewhat tenuous, is now faltering again, exposing the market to a subtler but equally damaging risk: whales moving to the sidelines.

Markus Thielen, CEO of 10X Research and former Millennium Management portfolio manager, sees growing signs of fatigue. He notes that after Bitcoin’s underwhelming 10% gain this year—lagging gold and tech stocks—some professional investors are losing patience. Thielen warns that if prices resume their decline, risk advisors may urge institutional clients to trim holdings before year-end.

「At some point, risk managers may step in and say, ‘You need to exit or reduce exposure,’」 he said. 「Bitcoin risks further underperformance as portfolios get rebalanced. When sending statements to investors, you might need more Nvidia shares than Bitcoin.」

Bloomberg data reveals roughly $2.8 billion in net outflows from spot Bitcoin ETFs over the past month. Thielen suggests that if upward momentum stalls further, billions more could exit ahead of December’s Fed meeting.

This risk isn’t hypothetical. On-chain signals indicate long-term holders have been selling into strength. Though much speculative leverage was wiped out during October 10’s crash, Thielen warns that if Bitcoin breaches the key $93,000 support level, more holders may capitulate. 「There’s a massive gap here—if broken, many will quickly fall underwater. Players with weaker balance sheets could be forced to liquidate,」 he said.

Citi Group sees similar red flags. Alex Saunders, head of quantitative macro research at Citi, noted, 「New money is cautious, lacking urgency or FOMO. Maybe enthusiasm has faded.」

He pointed to shifting wallet behavior. Citi’s analysis shows 「whale」 wallets holding 1,000+ BTC are gradually declining, while retail wallets with under 1 BTC are growing. Typically, $1 billion in weekly inflows boosts prices by ~4%, meaning current stagnation is capping gains.

「Whales」 encompass diverse holders—early adopters who bought at single-digit prices, institutional accounts, and exchanges. Wallet movements don’t always signal direct selling; large holders often shift tokens for liquidity or custody purposes.

A prime example of waning institutional appetite is MicroStrategy, the software-turned-Bitcoin-holding giant. Once a corporate treasury benchmark, its stock now trades near the value of its Bitcoin holdings, suggesting investors no longer pay a premium for its leveraged conviction.

Still, while crypto momentum has cooled, panic is absent. Bitcoin remains up sharply over 18 months, and speculative demand persists across markets.

Bitfinex analysts caution against interpreting recent data as panic selling or a market top. Their research shows wallets holding 10,000+ BTC shed just 1.5% in October—hardly a fire sale. They call ETF outflows 「transient weakness, not structural risk.」

「Whales aren’t dumping in panic but gradually taking profits amid weak ETF demand—a pattern seen in prior cycles,」 Bitfinex wrote. 「Once inflows and liquidity improve, these rebalancing phases typically reset positions and volatility for the next rally.」