BTC Drawdown Hits 35% as Miner Capex and ETF Flows Point to AI Rotation, Not Breakdown

Bitcoin is down more than 35% over the past three quarters, and the flow data behind that drawdown is starting to look less like a valuation collapse and more like a rotation. Spot BTC ETFs have logged a string of outflows this year, punctuated only by brief stabilization windows. Bitcoin miners are increasingly redirecting capex toward AI data center buildouts rather than defending mining margins, and several corporate BTC holders have trimmed treasury exposure to cap losses.

The Liquidation Data Point

The clearest single data point in this cycle came from @techleadhd, a former Google and Meta software engineer, who disclosed he fully exited his BTC position across the last two quarters. He frames the sell-off not as a fundamentals reset but as an attention-flow migration — institutional focus and capital moving toward AI rather than out of risk assets entirely.

His model treats BTC pricing as a function of marginal-buyer attention rather than aggregate holder count. As quoted by ZyCrypto: “Price is not about how many people buy and hold it’s about whether a new buyer shows up tomorrow willing to pay more and so the moment attention disappears, so to does the buyer and that’s the whole mechanism and the same may happen to Bitcoin as well. Holding does not save you, only the next buyer does. So the difference is attention.” He compares the current setup to the NFT cycle, where multimillion-dollar valuations evaporated once buyer attention rotated away and no fresh bids replaced the exiting ones.

Supply-Side and Demand-Side Signals Aligning

The on-chain and balance-sheet evidence lines up with that framing on both sides of the market. On supply, miners chasing thinner margins are redeploying capital into AI-linked infrastructure — a hedge that also signals reduced conviction in near-term BTC price recovery. On demand, spot ETF outflows this year indicate institutional allocators trimming rather than buying weakness, while large corporate holders liquidating BTC treasury positions adds another layer of sell pressure independent of retail flows.

Whale wallets, meanwhile, have gone quiet after an extended positioning stretch — a lack of fresh distribution that suggests the market is waiting on a catalyst rather than being actively sold into further. @techleadhd says he remains structurally bullish long-term and plans to re-enter BTC at lower prices, though he gave no timeframe, a stance consistent with bulls who fully de-risk during drawdowns before an undated re-entry.

For traders, the more tradeable signals sit in the flow cadence rather than the sentiment: ETF inflow/outflow prints and any measurable shift in miner capex allocation between BTC infrastructure and AI compute offer harder confirmation of a rotation thesis than commentary alone.

Read more: BTC ETFs Snap 16-Day Outflow Streak With $90.4M Inflow as Spot Holds $64K

Sources

• zycrypto.com