Bitcoin’s sharp sell-off this past week was accompanied by a surge in on-chain activity tied to BlackRock’s Bitcoin ETF. Blockchain data shows large transfers to Coinbase Prime as ETF redemptions increased.
Data from Arkham indicates that there are at least eight IBIT-linked transfers in total 2,268 BTC were forwarded to Coinbase Prime Deposit within a tight time frame.
The moves followed a period of increased market stress, which quickly saw Bitcoin disappear from the market mid $80,000 to high $60,000 before making a modest attempt rebound near $70,000.
Bitcoin ETF redemptions correspond to Prime deposits
Weekly ETF data provides crucial context for the on-chain activity. For the week ending On February 6, BlackRock’s Bitcoin ETF, IBIT, recorded net outflows of $115.14 million. This implies a repayment of approx 1,600–1,700 BTC at current prices.
Although BTC deposited at Coinbase Prime exceeded the net outflow figure, the difference is consistent with gross settlement flows, temporary staging, and operational buffers typical of ETF plumbing.
Source: SoSoValue
That’s important transfers to Coinbase Prime do not indicate immediate sale on the market. Coinbase Prime acts as the custody and execution layer for ETF creations and redemptions.
This means that BTC often moves there as part of a routine settlement before a final disposition.
Bitcoin Price Action Indicates Liquidation-induced Stress
Bitcoin’s price action over the same period supports a stress-induced interpretation rather than discretionary selling. The sell-off was rapid and vertical, and was accompanied by a clear spike in trading volume – hallmarks of liquidation-induced moves.
Momentum indicators reflected pressure rather than recovery, with the daily relative strength index dipping into oversold territory before stabilizing below the neutral level.
Source: TradingView
The subsequent bounce to $70,000 It lacked a strong follow-through, suggesting a relief rally rather than a confirmed trend reversal. In this context, ETF outflows appear to have retrospectively confirmed the downward pressure, rather than acting as a catalyst for the move.
Settlement mechanisms, not directional bets
All told, the order is consistent: price stress and liquidations first, followed by ETF redemptions and BTC routed to Coinbase Prime for settlement.
The available data does not indicate that BlackRock engaged in off-books or discretionary sales beyond standard ETF mechanisms.
As market volatility continues, ETF flows and related intra-chain movements are likely to remain sensitive to price fluctuations. For now, the data points to settlement-driven activity and not a longer-term shift in institutional belief.
Final thoughts
- BlackRock-linked BTC transfers to Coinbase Prime correspond to the ETF redemption scheme during a liquidation-induced sell-off.
- ETF outflows appear to confirm price weakness rather than signal that the market has bottomed.