Market pressure builds ahead of key economic data
Bitcoin extended its losing streak for the fourth consecutive day, dropping 0.9% in the past 24 hours to trade around $111,678. The decline reflects growing investor caution as markets prepare for upcoming U.S. inflation data. Traders seem uncertain about the Federal Reserve’s next moves, which has triggered a broader risk-off sentiment across financial markets.
Many investors are scaling back their exposure to Bitcoin and other risk assets. This cautious approach comes at a time when the broader crypto market appears to be cooling down after recent gains. The uncertainty seems to be affecting decision-making across the board.
ETF outflows and liquidations add to selling pressure
Following Monday’s significant $1.7 billion liquidation event—one of the largest this year—investors have been engaging in increased profit-taking. This trend suggests many are trying to reduce their Bitcoin exposure during this period of market uncertainty. The profit-taking appears to be driven by concerns about potential further declines.
Adding to the negative sentiment is a noticeable rise in ETF outflows. U.S.-listed Bitcoin tracking funds recorded approximately $466 million in outflows recently, which outweighed the smaller inflows seen earlier in the week. This pattern indicates institutional investors might be taking a more cautious stance.
Investors are also positioning themselves ahead of Friday’s $22.6 billion Bitcoin futures options expiry. Historically, Bitcoin tends to experience selling pressure before large expirations as leveraged positions unwind and traders hedge their risk. Some analysts think a relief rally could follow once this expiry passes and broader uncertainty clears.
Technical indicators signal weakening momentum
From a technical perspective, Bitcoin’s price has moved significantly below its September 19 peak near $117,000. The cryptocurrency is forming a descending pattern of lower highs and lower lows, which typically indicates bearish momentum. This pattern suggests the recent uptrend might be losing steam.
The Relative Strength Index (RSI) has dropped to around 42.30, signaling waning buying interest among traders. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator has flipped bearish with a growing negative histogram. These technical signals point to potential further downside if current conditions persist.
Trading volume remains relatively muted, highlighting indecision from both bullish and bearish traders. If Bitcoin fails to hold above the $110,000 support level, a further drop toward $108,000 seems possible. However, a recovery above $113,500 could potentially spark a price rebound.
The current market situation appears delicate, with multiple factors converging to create uncertainty. While the long-term outlook for Bitcoin remains debated among analysts, short-term conditions suggest continued volatility ahead of key economic data releases and market events.
