Bitcoin falls to 3-month low of $68,850
What's the story
Bitcoin has plunged to a near three-month low of $68,850.76 in early trading today. The cryptocurrency fell by 6.64% in the last 24 hours and 9.05% over the week, amid persistent institutional selling and concerns over tighter US monetary policy. The decline is further fueled by AI-sector valuations and weakening demand for US spot Bitcoin ETFs.
Market trends
US spot Bitcoin ETFs see $1.44 billion outflows
Over the last five consecutive sessions until November 11, US spot Bitcoin ETFs have seen some $1.44 billion in outflows. The trend indicates a weakening demand for the cryptocurrency.
Further, stronger-than-expected US inflation data has raised expectations of a December Federal Reserve rate hike, adding to the bearish sentiment in the market.
Market impact
MSCI's decision to remove strategy from benchmark indexes
Prateek Gupta, Head of Business at Mudrex, said the market sentiment has further weakened after MSCI announced plans to remove Strategy from its benchmark indexes.
The decision is putting additional pressure on crypto-linked stocks.
Gupta also noted that liquidity is tightening, with stablecoin supply contracting by $14.2 billion over 30 days, its sharpest decline since 2022.
Technical analysis
Traditional markets show partial support
According to Nischal Shetty, Founder of WazirX, Bitcoin's Relative Strength Index (RSI) near 29 shows the recent decline has pushed momentum toward oversold territory.
He said derivatives liquidations and hedging suggest stronger ETF inflows may be required before their impact is seen in spot markets.
Traditional markets offered partial support, with KOSPI gaining 2.12% and Nikkei rising 1.66%.
Market analysis
Near-term outlook remains bearish
Riya Sehgal, Research Analyst at Delta Exchange, said the selloff reflects a combination of US technology-stock weakness, institutional outflows and tighter monetary-policy expectations.
She added that the near-term outlook remains bearish, with ETF flows and US inflation data being key to determining whether markets stabilize or extend their decline.
Today's US Producer Price Index release could further influence expectations.
Investment strategy
Investors advised against chasing short-term dips
Vikram Subburaj, CEO of Giottus, advised investors against chasing short-term dips or using excessive leverage.
He suggested staggered entries and assessing individual altcoins on their fundamentals.
Subburaj also stressed the importance of watching Bitcoin's ability to hold $70,000 and looking for a sustained improvement in ETF flows before increasing exposure.