Over the past 24 hours, the crypto market’s market capitalization has fallen by 5.3%, reaching $2.32 trillion. Meanwhile, the sentiment index has dropped to 20 points, indicating extreme fear among investors. Bitcoin has already dipped below $67,500 and is now testing the 200-week moving average. If the decline continues, the next target is in the $63,000–$66,000 range. The decline in liquidity is linked to an outflow of approximately $2 billion from the BlackRock ETF and a sharp reduction in the volume of stablecoins by $14.2 billion.
Market Analysis
As of 07:00 GMT, the crypto sector’s market capitalization had fallen to $2.32 trillion, its lowest level since August 19. Alternative.me’s Fear and Greed Index dropped to 20, hitting its lowest level since July and entering the “extreme fear” zone. This low index is due to heavy selling that took place on the market during the midnight settlement at GMT.
On Friday, around 5:45 a.m. GMT, Bitcoin briefly dipped below $67,500, bringing its losses since the start of trading on November 11 to 9%. This occurred amid low liquidity ahead of the opening of European exchanges. During such periods, sharp price swings often trigger the execution of pending orders. Although the market subsequently attempted to stabilize, Bitcoin was unable to firmly hold above $69K. Since the price has crossed below the 200-day moving average, there is a risk of a further decline to the $63–66K range. On the daily chart, the RSI indicates oversold conditions, but this does not mean it is time to buy. To confirm a reversal, we need to wait for the price to rise and for the indicator to move out of this zone.
On the weekly chart, we see the price touching the 200-week moving average after breaking below the 50-week MA. The downtrend has been ongoing for six weeks now, during which Bitcoin has lost about a quarter of its value. The current touch of the line occurred after the longest period of trading above it (13 weeks) within a bull cycle. Previously, such touches and breaks of the 200-week moving average often signaled the bottom of a bear market, as was the case in 2018 and 2020, or foreshadowed a long crypto winter, as in June 2022. This year, a 40% rally from that line gave way to a correction, and the price is now only 10% above the levels seen during the August rally. Whether this will mark the beginning of a new crypto winter remains to be seen.
News
MSCI plans to remove Strategy and Metaplanet from its indices due to new valuation rules for companies that hold digital assets. This could trigger massive sell-offs of shares by index funds. According to JPMorgan’s forecasts, the volume of Strategy stock sales could reach $2.8 billion.
According to Farside Investors, approximately $2 billion has been withdrawn from BlackRock’s spot Bitcoin ETFs over the past nine trading sessions. The outflow has been ongoing since October 30.
Data from Glassnode shows that the supply of stablecoins has decreased by $14.2 billion over the past month. This is the sharpest decline since June 2022. When funds are transferred from cryptocurrency to fiat, liquidity drops, and it becomes more difficult for the market to recover quickly.
According to CryptoQuant, the volume of Bitcoin futures liquidations on Binance over the past three months has reached its highest level since 2021. Open interest in BTC has fallen by 17% in less than a month, indicating that traders have begun to use less leverage.
Mining company Hyperscale Data sold its entire holdings of 211 BTC. Canaan is also considering selling its reserves, as its stock price has fallen 75% since the beginning of the year.
Outlook
If the “bearish” scenario does not materialize, Bitcoin could rebound above $73K and return to its 200-day moving average.
However, there are risks: a cascade of stop orders and ongoing outflows from ETFs could accelerate the decline to $63,000–$66,000.
What’s next: a signal for a reversal would be the RSI moving out of the oversold zone amid a price rally. It’s also worth keeping an eye on U.S. producer price data, which will be released on November 13 at 1:30 p.m. GMT.