Summary
- Bitcoin fell below $60,000, reaching an intraday low of $58,189, marking a 6.4% decline over the week and nearing its lowest point since September 2024.
- On Thursday, U.S. spot Bitcoin ETFs saw outflows of nearly $692 million, the largest single-day drop since late May.
- A significant $10.6 billion options expiry is set for Friday, coinciding with over $1.1 billion in leveraged crypto positions being liquidated in the last 24 hours.
Bitcoin fell below the $59,000 mark on Friday morning, influenced by a new wave of ETF selling just as one of the year's largest options expirations is about to occur.
The leading cryptocurrency was trading at approximately $59,100 on Friday, down 6.4% for the week and about 53% lower than its all-time high of $126,080 reached in October. Its trading range in the past 24 hours spanned from $58,189 to $60,724, maintaining a market cap close to $1.18 trillion.
According to Myriad, a prediction market owned by Dastan, the parent company of Decrypt, traders anticipate that Bitcoin's next move may bring it down to $55,000, with a 77% likelihood for this outcome, increasing from 72% at the week's onset.
This decline follows a significant outflow of around $691 million from U.S. spot Bitcoin ETFs on Thursday, marking their largest one-day withdrawal since May 27, as reported by data from Farside Investors. The decrease in ETF holdings is more than a temporary phenomenon; annual growth in U.S. ETF Bitcoin holdings has dropped to "essentially zero" for the first time since these funds were launched in 2024. Julio Moreno, head of research at CryptoQuant, noted that the ETFs are now contributing to Bitcoin's supply instead of absorbing it, indicating that for a rebound to occur, purchasing activity must not only stabilize but also increase.
This selling pressure sets a challenging backdrop for Friday, with approximately $10.6 billion in Bitcoin options set to expire on Deribit, marking the largest quarterly settlement of the year. With Bitcoin trading significantly below the "max pain" level of around $72,000, it is expected that about 80% of these contracts will expire without value. Mike McCluskey, co-founder of tokenization platform tx, stated that the $60,000 level "remains the definitive line in the sand." He mentioned that a successful defense of this mark would indicate that dip buyers are still in control, while a breach could further accelerate declines in this low liquidity environment.
The pressure has already impacted leveraged traders, with over $1.1 billion in leveraged crypto positions liquidated within the last 24 hours, primarily affecting bullish bets, which accounted for $875 million, according to data from CoinGlass.
This downturn is attributed to a tighter macroeconomic environment. Bitcoin's value has decreased following the hawkish stance of new Fed Chair Kevin Warsh, as traders prepare for prolonged high interest rates. This week, Bitcoin briefly dropped to its lowest level since September 2024, falling below its 200-week moving average, a level historically viewed as a crucial psychological and technical support, according to McCluskey.
During a Thursday AMA, Galaxy Digital CEO Mike Novogratz emphasized that Bitcoin's bullish outlook hinges on two key factors: the passage of the Clarity Act and a potential Fed rate cut. He noted that the ongoing conflict in Iran has delayed the rate-cutting cycle, suggesting that if the war concludes and oil prices revert to $60, it could pave the way for a late fourth-quarter rate cut or an early first-quarter rate cut next year. Until a new catalyst emerges, he anticipates Bitcoin will remain range-bound, waiting for "some new story" to drive it higher.