Institutions Trap Retail Ahead of BTC, ETH, XRP Options Expiry & Nonfarm Payrolls

The crypto market is flashing multiple red alerts for a potential crash, with significant ETF outflows and selloffs by Trump-linked World Liberty Financial and Mike Novogratz’s Galaxy Digital. Traders are turning cautious ahead of Bitcoin (BTC), Ethereum (ETH), and XRP options expiry and US Nonfarm Payrolls data today.

Analysts caution that these factors may lead to heightened volatility and increased downside risk for retail investors. Institutional investors are selling crypto holdings, leaving retail holders trapped.

Bitcoin, Ethereum, XRP, Solana ETFs Record Outflows Indicate Institutional Selloffs

Institutions have redeemed massive holdings from all four leading US-listed spot Bitcoin, Ethereum, XRP, and Solana ETFs. After inflows for multiple days, Bitcoin ETFs saw $227.9 million in outflows. BlackRock’s IBIT and Fidelity’s FBTC led with $88.7 and $48 million redemptions, according to SoSoValue data.

Ethereum ETFs recorded $90.9 million in outflows, with $115 million in redemptions from Fidelity’s FBTC. In contrast, BlackRock’s ETHA saw $30.3 million in inflows.

Spot XRP ETFs and Solana ETFs also saw net outflows, indicating institutions liquidated their crypto holdings despite the latest inflows into spot ETFs amid market rebound.

This structural selling pressure from ETFs would contribute to downward price momentum. TradFi could reallocate capital toward equities or bonds as oil prices rise amid the US-Iran war.

WLFI and Galaxy Digital Selloffs Intensify Crypto Market Crash Risks

The Trump family-backed World Liberty Financial (WLFI) started depositing WLFI tokens into crypto exchanges. Onchain Lens reported 16.71 million WLFI deposited to OKX.

Selloffs by the WLFI team have earlier triggered liquidations by whales and institutions, resulting in a broader crypto market crash. WLFI price is trading 0.40% down at $0.103, with a 40% drop in trading volume.

Crypto firm Galaxy Digital has offloaded 3,100 BTC over the last few days. Mike Novogratz’s company has also reported significant losses in previous quarters due to Bitcoin price crash. These developments contribute to on-chain and derivatives indicators that suggest reduced conviction among major market participants.

Latest spot CVD data shows a shift from aggressive buying to selling, open interest is declining and funding rate is turning negative. Coinbase premium index has also turned red again. This signals institutions are readjusting positions after expansion, with the market cooling off while leverage resets.

Crypto Market Braces for Crash on BTC, ETH, and XRP Options Expiry

According to Deribit, $2.6 billion in crypto options are set to expire today. Almost 32K BTC options for $2.2 billion notional value to expire, with an extreme bearish put/call ratio of 1.75 and a max pain price at $69,000.

Over 191K ETH options of notional value $400 million to expire, with a put/call ratio of 0.91. The max pain price is at $1,950, signaling a potential drop to the strike price.

XRP options are also expiring alongside broader altcoin derivatives. Traders are betting on a drop to $1.35 in the coming days. Traders are bracing for a crypto market crash amid rising volatility, declining open interest, and increasing macroeconomic uncertainty.

Nonfarm Payrolls Report Emerges as Key Macro Catalyst

The US Bureau of Labor Statistics will release February’s Nonfarm Payrolls and unemployment rate today at 8:30 ET. Consensus forecasts expect Nonfarm payrolls to come in at 59K in February, marking a sharp slowdown from the 130K recorded in January.

The unemployment rate is expected at 4.3%, similar to last month. Recent jobs data have signaled a stable US labor market, waning Fed rate cut odds. More signals of a strong labor market will trigger a crypto market crash.

Investors will likely wait for next week’s CPI and PCE inflation data for cues on market direction. With the US-Iran war escalating, inflation concerns are expected to delay Fed rate cuts. Fed officials will also look at JOLTS job openings and housing data to make a decision before the March 2026 FOMC Meeting.