Crypto Funds Experience $3 Billion Outflows Over Three Consecutive Weeks

Significant Outflows in Crypto Funds

  • Crypto-focused funds experienced substantial outflows, with $2 billion exiting last week, marking the largest withdrawal since February.
  • Total withdrawals over the past three weeks have reached $3.2 billion.

Bitcoin and Ethereum Withdrawals

  • BTC saw $1.4 billion withdrawn, while ETH faced $689 million in outflows.
  • The average daily outflows as a percentage of assets under management (AuM) have reached unprecedented levels.
  • Total AuM has declined by 27%, now standing at $191 billion.

Market Sentiment and Analysis

  • Bitcoin remains in a bear market, trading below the 50-week exponential moving average (EMA), currently above $10,000.
  • Three potential scenarios for Bitcoin's future:
    • A drastic descent into lower prices, considered unlikely due to oversold conditions.
    • A short-term rally testing the 50-week EMA before a downturn.
    • Potential recovery to reclaim the 50-week EMA by year-end, influenced by macroeconomic factors.

Concerns Over Strategy's Position

  • Strategy, formerly known as MicroStrategy, faces risks if Bitcoin falls below their average purchase price of just below $80,000.
  • Possible forced liquidations could drive Bitcoin prices toward $10,000 or lower.
  • Skepticism surrounds crypto market sustainability, reflecting on past strategies encouraging extreme investment measures.

As of now, Bitcoin trades at $84,700, significantly below its all-time high of $126,000 earlier in October.