Bitcoin plummeted to a seven-month low, falling below $90,000 this week, as institutional investors accelerated outflows from U.S. spot exchange-traded funds amid broader macroeconomic concerns.
The cryptocurrency recorded a local low of $89,368, representing a 28% drop from its all-time high of $126,000 reached last month. This sharp correction has intensified market anxiety over digital asset stability.
“Bitcoin has fallen below the $90,000 mark in today’s session, a significant psychological breach that underscores the market’s current fragility,” stated Rachael Lucas, a crypto analyst at BTC Markets, earlier this week.
U.S.-regulated spot Bitcoin ETFs experienced net outflows exceeding $2.5 billion in November, marking their second-worst month since their launch. This significantly contributed to the selling pressure.
Following the breach below $89,600, American Bitcoin ETF investors collectively entered negative territory for the first time since these funds debuted in January 2024, according to Glassnode analyst Sean Rose.
Lucas added that institutional investors are “leading the initiative, with ETF outflows indicating profit-taking and risk positioning before year-end.”
Vincent Liu, Chief Investment Officer at Kronos Research, noted that leveraged traders and funds adjusting their exposure are contributing to the downturn. Macroeconomic factors like asset rotation and uncertainty surrounding the Federal Reserve’s monetary policy also weigh on the market.
Liu observed that long-term holders largely retain their confidence in Bitcoin as “digital gold.” However, he pointed out that market liquidity has been impacted by the recent U.S. government shutdown, which led to an increase in the Treasury General Account and restricted non-essential government spending.
Market sentiment has descended into “extreme fear,” with the Fear & Greed index registering just 15 points.
Despite the widespread apprehension, some investors view the correction as a buying opportunity. Cameron Winklevoss, co-founder of the Gemini exchange, declared on X that this would be “the last time you’ll be able to buy bitcoin below $90,000!”
This is the last time you'll be able to buy bitcoin below $90k!
— Cameron Winklevoss (@cameron) November 19, 2024
Analysts have identified key short-term support levels for Bitcoin between $85,000 and $87,000. A break below $80,000 could see the price drop further to $74,000, a level last seen in February.
Upcoming economic data, including U.S. unemployment figures due later this week, and the Federal Reserve’s December interest rate decision, could introduce further volatility. CME FedWatch data indicates a 57.1% probability of no rate cut.
Bitcoin partially recovered to $91,500 by the article’s close, after experiencing a 3.4% decline in the preceding 24 hours.