- Bitcoin briefly dipped below US$84k early Tuesday morning Australian time before recovering above US$86,547, while Ethereum fell below US$3k.
- QCP Capital attributed the downturn to weak weekly and monthly closes, post-Thanksgiving US trader selling pressure, and Asia-driven headwinds including Japan’s potential rate hike.
- BRN’s Timothy Misir characterised the sell-off as a liquidity and positioning shakeout reflecting a “classic late-cycle pattern” rather than a fundamental trend shift.
- US spot Bitcoin ETFs experienced their worst month since February with US$3.48 billion in November outflows, though the last four trading days saw a slight recovery.
Bitcoin’s recovery rally stalled after it dipped below US$84k (AU$128.2k) early Tuesday morning Australian time. The OG crypto fell as low as US$83,909 (AU$128,130) but managed to climb back above US$86,547 (AU$132,158) at the time of writing.
Other crypto assets also struggled to keep afloat. Ethereum (ETH), for example, has dropped below US$3k again and is trading at US$2,795 (AU$4,268) at the time of writing.
Analysts React to Market Downturn
QCP Capital says crypto entered the week on the back foot after weak weekly and monthly closes, with selling pressure persisting as US traders returned post-Thanksgiving. The firm points to several Asia-driven headwinds – including Japan’s potential rate hike, unusually thin liquidity, and market worries about potential Bitcoin sales from Strategy – as key factors weighing on sentiment in the near term.
BRN’s head of research Timothy Misir told The Block that the divergence between slowing whale activity and rising retail accumulation shows a classic late-cycle pattern that leaves markets more fragile. He says the latest sell-off is more of a liquidity and positioning shakeout than a deeper shift in market trend.
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The drop in price also comes amid big expectations for US interest rate cuts, though some analysts say the market had already priced this in. Meanwhile, reports revealed that US$11 trillion (AU$16.8 trillion) asset manager Vanguard will let clients access crypto products such as Bitcoin exchange-traded funds (ETFs).
Spot ETFs Reverse Outflows
Meanwhile, spot Bitcoin ETFs saw heavy outflows in November – the worst since February. The month recorded US$3.48 billion (AU$5.31 billion) in net outflows. The largest fund, BlackRock’s IBIT, reported US$2.34 billion (AU$3.57 billion) in net outflows.
After four straight weeks of net outflows, the market finally saw signs of recovery though, ending the month with net inflows, albeit smaller than usual.
The last four trading days have brought in US$295.6 million (AU$451.3 million) in net inflows, with IBIT’s numbers still pending.
Altogether, US spot Bitcoin ETFs still hold around 1.3 million BTC – roughly 6.2% of the maximum supply.
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