Bitcoin Price Nears $55,000 as ETFs See 7th Day of Outflows

Bitcoin fell to a low of just over $55,000 on Friday morning, and experts warned that a further drop to $50,000 was possible as outflows from Bitcoin ETFs continued for a seventh straight day.

that Bitcoin Price According to CoinGecko data, it once fell to $55,363 before recovering to its current price of $56,125, down 1% on the day. This reflects the overall market uncertainty and investors’ reduced risk appetite.

Market analysts have pointed out that several factors, including continued ETF outflows, broader economic concerns, and technical indicators, are converging to suggest that Bitcoin is likely to experience a larger correction in the short term.

While some see the current volatility as a potential opportunity, the prevailing sentiment appears to be cautious, with the Crypto Fear and Greed Index dropping to 22, indicating “extreme fear” among investors.

Bitcoin ETF records 7th consecutive day of fund outflows

Bitcoin’s decline comes amid massive withdrawals from cryptocurrency ETFs.

According to data from SoSo Value, Bitcoin spot ETFs experienced a total net outflow of $211 million on September 5, marking the seventh straight day of withdrawals, the longest outflow streak since June.

Fidelity’s FBTC had the biggest loss of the day on September 5, with $149.5 million in outflows, while Bitwise (BITB) and Grayscale Bitcoin Trust (GBTC) ETFs saw $30 million and $23.2 million in outflows, respectively. The total net asset value of Bitcoin spot ETFs now stands at $50.727 billion.

Ethereum ETFs were also hit, with net outflows of $152,700 on September 5. In particular, the Grayscale (ETHE) ETF experienced net outflows of $7,389,500 in a single day. However, in an interesting twist, Grayscale’s mini ETF (NYSE: ETH) bucked the trend with net inflows of $7,236,800 on the same day.

Talk to ~ DecodeDavid Morrison, a market analyst at FCA-regulated firm Trade Nation, said risk appetite has decreased significantly this week, pointing to broader market dynamics that are influencing cryptocurrency prices.

“Investors appear particularly nervous ahead of today’s US nonfarm payrolls report and next week’s inflation update, with the Fed’s rate decision due on September 18,” he said.

Market anxiety was further evidenced by mass liquidations.

According to data from Coinglass, $98.58 million in liquidations occurred across the cryptocurrency markets in the past 24 hours, with long positions taking the biggest hit at $74.11 million.

Andy Lian, an intergovernmental blockchain advisory board member, predicted that Bitcoin will drop below $55,000 this week and continue to fall to around $50,000 thereafter.

He tied this prediction directly to ETF outflows, saying, “The fall started on August 30th and struggled to stay above $60,000. This is also the time when we see significant ETF outflows.”

Raj A. Kapur, founder of the Blockchain Governance Council, sees several factors at play in the current market dynamics.

“The Nvidia stock price crash after the US subpoena seems to have set Bitcoin ablaze,” Kapur said.

He elaborated on the current negative sentiment in the crypto market, claiming that the decline has spooked investors and now they fear that the bottom has fallen in, at least for the time being. “The current support levels for Bitcoin are on thin ice and I expect the bottom to crash to 50k or even lower,” he said.

“Every dip is an opportunity in disguise and investors should closely monitor key support levels at $56,000, $47,000 and $40,000,” he suggested. “A move above and below these levels would signal a potential reversal.”