Bitcoin Retests Critical 200-Week Moving Average Amid Deepening Crypto Sell-Off

• The total cryptocurrency market capitalization dropped 5.3% within 24 hours to $2.32 trillion, while the sentiment index fell to 20, indicating extreme fear.
• Bitcoin slid below $67,500 and is now retesting its 200-week moving average, with the next downside target seen in the $63,000–$66,000 range.
• Approximately $2 billion in outflows from BlackRock’s spot Bitcoin ETF, combined with a $14.2 billion contraction in stablecoin supply, are sapping market liquidity.

Market Overview

The cryptocurrency market capitalization has declined 5.3% over the past day to $2.32 trillion as of 07:00 GMT, reaching lows last seen on August 19. The Alternative.me Crypto Fear & Greed Index plunged to 20, its lowest reading since July, firmly entering extreme fear territory. One factor behind the low score was that the market was undergoing a sharp sell-off when the daily indicator was calculated at midnight GMT.

Bitcoin briefly fell below $67,500 at 05:45 GMT on Friday, extending its losses since November 12 to 9%. The latest decline coincided with thin liquidity ahead of the European trading session. During such periods, markets often move sharply as pending orders are triggered once price breaks out of an established range—exactly what occurred here. Although there were attempts to rebound and stabilize, Bitcoin failed to hold above $69,000. This rapid acceleration following the breach below the 200-day moving average suggests the downtrend may persist. We previously flagged the $63,000–$66,000 zone as the next potential target. That said, the daily Relative Strength Index (RSI) is currently oversold. RSI readings below 30 are not, by themselves, a buy signal; traders should wait for a price rebound accompanied by the RSI moving out of oversold territory.

On the weekly chart, the situation is equally notable. Bitcoin is testing the 200-week moving average after accelerating its decline following a break below the 50-week MA. The current downtrend has now lasted six weeks, wiping out roughly a quarter of Bitcoin’s value. This return to the key average follows 13 consecutive weeks of trading above it—the longest such stretch during the current bull market. Historically, touches of or dips below the 200-week moving average have been common for Bitcoin: in 2018 and 2020, such touches marked bear-market bottoms, while in June 2022, an extended slide below the curve signaled the start of a 16-month crypto winter. This year, a 40% rally from the long-term average has given way to a decline, leaving Bitcoin just 10% above the starting level of the August rally. We do not believe crypto winters are becoming more frequent.

News Background

Index provider MSCI will remove Bitcoin treasury firms Strategy and Metaplanet from the MSCI USA and MSCI Japan Small Cap indices, respectively. The move stems from new assessment criteria for companies effectively engaged in asset custody. The exclusion could compel index-tracking funds to sell shares in both companies. JPMorgan previously estimated that such a scenario could trigger around $2.8 billion in Strategy share sales.

Farside Investors reports that investors have withdrawn roughly $2 billion from BlackRock’s spot Bitcoin ETF over nine trading sessions, with outflows continuing since October 30.

According to Glassnode, total stablecoin supply has contracted by $14.2 billion over 30 days—the fastest pace since June 2022. Investors are moving funds from crypto into fiat, draining liquidity and hampering a recovery in digital assets.

CryptoQuant notes that Bitcoin futures liquidations on Binance have hit their highest level since 2021 over the past three months. Open interest in BTC has fallen 17% in under a month, indicating deleveraging across the market.

Mining firm Hyperscale Data has sold all of its remaining Bitcoin holdings (approximately 211 BTC). Meanwhile, ASIC manufacturer Canaan has not ruled out further sales of its crypto reserves, as its share price has plunged 75% since the beginning of the year.

What to Watch

Invalidation: Bitcoin reclaiming $73,000 and returning to the 200-day moving average after slipping below it.

Risk: Triggered stop-loss orders and continued ETF outflows could accelerate the decline toward $63,000–$66,000.

Upcoming: An RSI move out of oversold territory combined with a price rebound would signal a potential bounce. U.S. producer prices are due on November 13 at 13:30 GMT. Consult the economic calendar for additional events.

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