Bitcoin tumbled to lows of just over $55,000 Friday morning, with experts warning of a potential further decline to $50,000, as Bitcoin ETFs hit a seven-day streak of outflows.
The price of Bitcoin slipped to lows of $55,363, before recovering to trade at its current price of $56,125, down 1% on the day, per data from CoinGecko—reflecting broader market jitters and diminishing risk appetite among investors.
Market analysts pointed to a confluence of factors, including sustained ETF outflows, broader economic concerns, and technical indicators, suggesting that Bitcoin could be poised for a more substantial correction in the near term.
While some see the current volatility as a potential opportunity, the prevailing sentiment appears cautious, with the Crypto Fear and Greed Index dropping to 22, indicating “extreme fear” among investors.
Bitcoin ETFs post seven-day outflow streak
Bitcoin’s decline comes against a backdrop of significant withdrawals from cryptocurrency ETFs.
Bitcoin spot ETFs experienced total net outflows of $211 million on September 5, marking the seventh consecutive day of withdrawals—the longest streak of outflows since June, according to data from SoSo Value.
Fidelity’s FBTC was the biggest loser of the day, with outflows of $149.5 million on September 5, while the Bitwise (BITB) and the Grayscale Bitcoin Trust (GBTC) ETFs saw outflows of $30 million and $23.2 million respectively. The current total net asset value of Bitcoin spot ETFs is $50.727 billion.
Ethereum ETFs also took a hit, with total net outflows of $152,700 on September 5. Notably, Grayscale’s (ETHE) ETF experienced a net outflow of $7.3895 million in a single day. However, in an interesting twist, Grayscale’s mini ETF (NYSE: ETH) bucked the trend with a net inflow of $7.2368 million on the same day, data shows.
Speaking with Decrypt, David Morrison, Market Analyst at FCA-regulated firm Trade Nation, pointed to broader market dynamics influencing crypto prices and said there has been a significant decline in risk appetite this week.
“Investors appear very nervous, especially ahead of today’s US Non-Farm Payroll report and next week’s inflation update, with the Fed’s rate decision coming on 18th September,” he said.
The nervousness in the market is further evidenced by substantial liquidations.
According to data from Coinglass, the past 24 hours have seen $98.58 million in liquidations across the crypto market, with long positions bearing the brunt at $74.11 million.
Anndy Lian, an intergovernmental blockchain adviser, predicted that Bitcoin will drop below $55,000 this week and will continue to fall to around $50,000.
He tied this projection directly to ETF outflows, stating that, “The fall began on 30 August, struggling to stay above $60,000. This is also the same time where we see significant ETF outflow.”
Raj A. Kapoor, founder of the Blockchain Governance Council, sees multiple factors at play in the current market dynamics.
“With Nvidia’s stock plummeting following the US subpoena, is where I see the spark that is burning Bitcoin,” Kapoor said.
He elaborated on the current negative crypto market sentiment, arguing that the drop has spooked investors, who now fear that the bottom has fallen off, at least for the interim. “Bitcoin’s current support level is on thin ice and I foresee the bottom plummeting to 50k or even lower,” he said.
“Any decline is an opportunity in disguise and investors should closely monitor the critical support levels of $56,000, $47,000 and $40,000,” he added, suggesting that, “An uptick from here and above these levels will indicate a potential reversal.”
