Digital asset exchange-traded products extended their outflow streak to three consecutive weeks, with net redemptions slowing to $187 million, according to data from CoinShares. Bitcoin-focused products accounted for the majority of withdrawals, shedding $264.4 million, while Ethereum ETPs saw modest inflows of $5.3 million. XRP and Solana products attracted $63 million and $8.2 million, respectively.
Liquidity Concerns Amplify Price Swings
Market depth for Bitcoin has deteriorated significantly, with the average 1% market depth—a measure of order book liquidity—falling to approximately $5 million from over $8 million in 2025, according to Kaiko. This thinning liquidity pool means routine trading activity can trigger sharper and more volatile price movements, exacerbating recent declines.
Spot Ethereum ETFs in the U.S. faced net outflows of $21.3 million on February 6, with BlackRock's iShares Ethereum Trust (ETHA) alone seeing $45.4 million exit. Over the five-day period from February 2 to 6, net redemptions for these funds reached roughly $170 million, though some newer products like Bitwise's ETHW and Grayscale's Ethereum Mini Trust attracted fresh capital.
Ethereum's Volatile Week
The price of Ether dropped more than 30% last week, briefly touching $1,700 before rebounding to trade above $2,000. The decline has been attributed to substantial outflows from major Ether funds and a wave of forced liquidations in leveraged futures positions, which accelerated the downward move.
This downturn marks a potential sixth consecutive monthly loss for Ethereum since September. The token fell to $1,746 on February 5, its lowest level since April. Some analysts note that the ether-to-bitcoin ratio is beginning to resemble patterns seen before previous major rallies, suggesting that a stabilization in liquidity could precede rapid and volatile price moves.
However, the near-term outlook remains cautious. While the pace of outflows has decelerated, persistent redemptions combined with fragile order books and residual leverage in the system leave the market vulnerable to further waves of forced selling. Holding the $2,000 support level will be a key test for Ethereum, with flow data likely to carry more weight than price action in the coming sessions.
