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Bitcoin has taken a sharp downturn, driven by U.S. spot Bitcoin ETF outflows and the looming options expiration. These factors have heightened market uncertainty, causing many investors to adopt a more cautious stance. Technical analysis indicates that if BTC finds support around $69,000, a potential rebound could be on the horizon.
Currently, Bitcoin is trading near $69,532, having dropped close to 4% in the past 24 hours. While it recently neared an all-time high, inspiring optimism among investors, BTC finished October at $70,000, just shy of the record $71,297. This drop has also impacted the altcoin market, with significant losses in major tokens, including Ethereum.
The decline was particularly hard on futures traders, leading to approximately $300 million in losses, with $247 million of that from long positions.
What’s Driving Bitcoin’s Decline?
One key factor behind Bitcoin’s pullback appears to be the sell-off in U.S. spot Bitcoin ETFs. Most major ETFs, apart from BlackRock’s IBIT fund, experienced cash outflows. The ARKB ETF saw a $94 million outflow, while Fidelity’s FBTC and Bitwise’s BITB each recorded $75 million in outflows, raising concerns. Although U.S. spot Bitcoin ETFs saw inflows of around $2 billion over the past two days, Thursday’s net inflow was just $32 million.
Adding to the pressure, roughly $2 billion in options contracts expired on Friday. The options volume on Deribit hit $1.96 billion, with a notable $1.3 billion in open interest on $80,000 strike prices. Major exchanges, including CME, also saw trading volumes climb as expiration approached.
The crypto market is also grappling with political and economic uncertainties surrounding the upcoming U.S. presidential election. Wall Street analysts anticipate a potential rate cut from the Federal Reserve next week, spurring profit-taking among crypto investors. Some investors are also adopting a cautious stance, considering the possibility of Republican candidate Donald Trump winning the 2024 election.
Will Bitcoin Find Support at $69,000?
Technical analyst Ali Martinez highlights the $69,000 level as a potential support for Bitcoin. If this support holds, BTC could be positioned to recover and potentially target the $78,000 level. However, investors remain cautious, closely watching to see if this critical support will hold.
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