Bitcoin could face another leg lower as a combination of macroeconomic uncertainty, continued spot ETF redemptions and forced unwinding of leveraged positions puts pressure on the market, according to Lacie Zhang, research lead at Bitget Wallet.
The largest digital asset sank below $69,000 late Thursday and extended its slide to $67,568, its weakest price since late August, before climbing back above $68,000, per CoinGecko.
In a Friday note, Zhang said October’s consumer price index reading, which showed a 0.4% month-over-month increase against economists’ expectations, pushed the probability of a December Federal Reserve rate hike to approximately 85%, lifting Treasury yields and the US dollar.
These conditions have weakened demand for non-yielding risk assets, she stated.
“Weakness in technology stocks has reinforced the broader de-risking move, and once Bitcoin lost the $72,000-$73,000 area, forced liquidations accelerated the decline,” Zhang noted.
“For Bitcoin, $68,000 is the immediate support level, followed by $65,000-$66,000. A decisive break below that zone could expose $62,000-$63,000. On the upside, $72,000-$74,000 is now the first resistance area,” she added.
The drop set off $1.6 billion in liquidations over the past day, affecting 185,172 traders, according to CoinGlass data. Binance accounted for the largest share of liquidations at above 35%.
Bullish traders were hit hardest. Long liquidations made up approximately $1.5 billion, or 89.5% of the daily total, while shorts accounted for $170 million, or 10.5%.
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The sell-off pulled the rest of the market lower. Ether lost the $2,000 level, and total crypto market capitalization fell close to 4% to $2.4 trillion.
Among the top 100 coins by market cap, Bitway was the worst performer over the past 24 hours, down about 12%, per CoinGecko. Gate fell 12%, and Stacks and Midnight each lost about 10%.
Persistent ETF outflows
On institutional demand, US-listed spot Bitcoin ETFs were on track for their sixth consecutive trading day of net outflows on Thursday, following approximately $1.4 billion in withdrawals between November 5 and November 11, according to data tracked by Farside Investors. BlackRock’s IBIT alone accounted for more than $1 billion in net outflows over that period.
Preliminary data showed approximately $48 million in net outflows on Thursday, although figures from BlackRock’s IBIT and Fidelity’s FBTC were still pending at press time.
Index removals
MSCI is set to remove Strategy (formerly MicroStrategy), Metaplanet, and Yellow Cake from its global equity benchmarks, effective November 30. Index-tracking funds holding those names would need to sell, with estimates suggesting up to $8.8B in passive outflows.
