Bitcoin fell below $70,000 on Friday, extending its recent decline as investor sentiment weakened amid institutional outflows, tighter liquidity and broader macroeconomic pressures.
Bitcoin (BTC) was trading at $68,607.23 at the time of writing, down 9.2% over the past week, according to CoinGecko.
The decline came alongside a sharp deterioration in market sentiment. The Crypto Fear & Greed Index fell to 20 on Friday, its lowest reading in more than four months, placing it in “extreme fear.” The index last reached that level on July 8.
Vikram Subburaj, CEO of crypto exchange Giottus, attributed Bitcoin’s weakness to institutional outflows, tighter crypto liquidity and expectations of a Federal Reserve interest rate hike in December. “Investors should avoid chasing short-term dips or using excessive leverage,” he said.
In a Friday report, 10x Research pointed to Bitcoin’s divergence from US equities. From Nov. 5 to Nov. 12, Bitcoin fell 5.9%, while the Nasdaq 100 rose 6.4%. This suggested the cryptocurrency was reacting more to rising Treasury yields and a stronger US dollar than to technology stocks.
The research firm said Bitcoin was increasingly trading in tandem with gold, which fell 5.5% over the same period, as the US 10-year Treasury yield rose above 5%.
Institutional trading platform Talos also warned that low liquidity and elevated leverage could amplify market volatility. Its weekly report found that Bitcoin order-book depth across major exchanges dropped to $72 million on Nov. 9, about 33% below normal levels.
“Liquidity remains thin while leverage stays elevated, leaving the market vulnerable to sharp moves in either direction,” said Tanay Ved, senior research associate at Talos. “A rebuild in order-book depth and a turn in capital flows would provide a firmer foundation for recovery.”
The selloff follows sustained withdrawals from US spot Bitcoin exchange-traded funds (ETFs). BlackRock’s iShares Bitcoin Trust (IBIT) saw more than $2 billion in net outflows over nine consecutive trading sessions through Wednesday, while funds overall lost nearly $1.44 billion over five sessions.
Preliminary data from Farside Investors showed a further $47.7 million in net outflows on Thursday, though figures for BlackRock and Fidelity were still pending.
