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ETF Liquidity Still Weak Despite Short-Term Inflows

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ETF inflows have not improved ETF liquidity, as experts highlight ongoing concerns. Weak demand continues to challenge the market’s ability to handle OTC selling, which may drive more coins into open trading and raise volatility. Institutional interest remains inconsistent, keeping ETF volumes underperforming and traders on edge.
ETF Liquidity Still Weak Despite Short-Term Inflows
  • ETF liquidity hasn’t fully returned despite some inflows
  • Lack of consistent demand signals bearish trend
  • OTC selling may push coins into the open market

After months of speculation and excitement around Bitcoin ETFs, recent signs show that liquidity is far from recovering. While there have been short bursts of inflows, the overall trend still leans negative. Experts are warning that despite temporary demand, the long-term picture for ETF liquidity remains concerning.

Short-term inflows can often mislead investors into believing that a bullish trend is forming. However, they are not always a reliable indicator of sustained institutional interest. In this case, those inflows have yet to translate into meaningful market support. ETF volumes are still lower than expected, and that’s keeping market participants cautious.

OTC Selling Adds Pressure to Open Market

One of the key issues is the growing concern about over-the-counter (OTC) selling. OTC trades usually happen off exchanges and are meant to avoid impacting the market price. However, if ETF demand doesn’t pick up soon, there won’t be enough buyers to absorb the OTC coins quietly. That could force these coins to move into open markets, adding downward pressure on prices.

This shift would likely result in increased volatility, as large amounts of tokens hit public exchanges without institutional buffers in place. It’s a warning sign that ETF liquidity is not just a temporary issue — it may reflect broader hesitancy from big investors.

Is ETF liquidity coming back? No, not yet.

“Short-term inflows may come back, but from a trend perspective, the picture is still negative. If there is no longer enough demand to absorb OTC selling,
those coins will eventually flow into the open market.” – By @mignoletkrpic.twitter.com/SdEVyCs3Wk

— CryptoQuant.com (@cryptoquant_com) January 16, 2026

What to Watch Next

Until ETF liquidity shows consistent growth and OTC sales find stable demand, the crypto market could continue facing headwinds. For investors, this means staying cautious and watching ETF flow data closely. Without real recovery in ETF activity, the market may struggle to maintain any meaningful upward momentum.

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