The outlook for the virtual currency market continues to worsen day by day. Bitcoin On Tuesday morning, it fell below $90,000 for the first time since April.
Amid the selloff, Bitcoin is down 4.5% in the past 24 hours, likely due to recent movements from the Mt. Gox wallet, according to CoinGecko data. According to Arkham data, approximately 185.5 BTC (equivalent to $16.8 million) was transferred.
However, due to the recent increase in purchasing pressure, bitcoin price It has risen 2% in the past five hours, recovering from an intraday low of $89,368 to $91,474. The market capitalization of all cryptocurrencies has fallen 20% from $4 trillion on October 14 to $3.2 trillion as of Tuesday.
The market enters the “risk management” stage
What is spurring the market decline is deteriorating market sentiment, due in part to a decline in demand from institutional investors.
Spot Bitcoin ETFs lost $2.59 billion in November, approaching February’s total of $3.56 billion.
Similarly, the Spot Ethereum ETF recorded net outflows of $728.57 million last week, the third-largest after May’s $787.74 million decline and September’s $795.56 million, according to SoSoValue data.
Shivam Thakral, CEO of Indian cryptocurrency exchange BuyUCoin, said the outflows from exchange-traded funds (ETFs) come as the market “moves from a momentum phase to a risk management phase.” decryption.
According to Thakral, apart from macroeconomic uncertainty, “profit protection from funds that entered early in the cycle and portfolio rebalancing following the extraordinary rise in cryptocurrencies relative to traditional assets from 2023 onwards” are the two main catalysts driving outflows.
Asked whether the weak ETF-led flows are here to stay, the expert added: “Financial institutions are not pulling out because long-term sentiment is negative. They are responding to a lack of catalysts, a slowdown in ETF inflows, and a temporary shift to risk-off positioning.”
Macro clarity remains critical to restarting the economic recovery and negating the possibility of a bear market, according to experts previously interviewed by Shivam. decryption.
How far can Bitcoin fall?
Although Bitcoin could fall, “downside room still appears to be relatively limited,” Thakral said.
If the bearish trend continues, Bitcoin could revisit the $82,000 to $85,000 range, the expert added, suggesting this is an area where “both the cost base of long-term holders and a cluster of ETF inflows reside.”
The odds of Bitcoin reaching $115,000 before $85,000 fell from 66.7% on Nov. 13 to 25% on Tuesday, according to data from prediction market Myriad. (Disclaimer: Myriad is the owner of decryption(parent company Dastan)
