Cryptocurrency Markets Test Critical Trend Line Amid ETF Outflows

Market Overview

The crypto market has shed just over 6% in the past week, slipping back to $2.46 trillion as European trading began on Monday. The market is now retesting the 200-day moving average—a key level we view as a primary target for bearish pressure. The central question is whether buyers are prepared to step back in. This dynamic extends beyond digital assets to U.S. big tech, amplifying uncertainty and leaving markets awaiting external signals, potentially from policymakers. Declines dominate among the most liquid coins, though select altcoins are edging higher, leaving the ratio of gainers to losers at roughly 1:7. Over the last 24 hours, Basic Attention Token (+2.6%), Immutable (+1.8%), and Dash (+0.5%) led gains, while XRP (-5.7%), Algorand (-5.3%), and Ethereum (-5.1%) posted the steepest losses.

Bitcoin is trading slightly above $74,000 after coming under intense pressure on Sunday and dipping to $73,500. The quick rally to $75,700 proved short-lived. Although Bitcoin rebounded from the 200-day moving average, we interpret this as a technical bounce, with meaningful capital inflows likely to arrive closer to the U.S. trading session. That is when the decisive battle for the long-term trend line will unfold. A rebound or a firm breakdown below this level could dictate the market’s direction for the coming days or even weeks, making this a critical juncture to watch.

News Background

U.S. spot Bitcoin ETFs have experienced outflows in four of the last five weeks, totaling $1.28 billion last week, according to SoSoValue. The weekly outflow was the largest since the end of June and more than double October’s total.

U.S. spot Ethereum ETFs have now seen outflows for six consecutive weeks, amounting to $365.3 million for the week.

The four-month high in outflows from U.S. spot Bitcoin ETFs coincided with a decline in the Nasdaq index. Peter Schiff, head of Euro Pacific Capital and a well-known crypto skeptic, said the artificial intelligence (AI) bubble has begun to deflate and warned that Bitcoin could be next to burst.

Retail investors have shown no signs of renewed activity on spot crypto exchanges over the past two and a half years. Consequently, traders have lost a traditional benchmark that previously helped identify market tops and bottoms, according to an analyst at BaykusCharts.

The People’s Bank of China has opened an investigation into companies and individuals involved in Solana’s operations within the country, citing a decree that classifies domestic cryptocurrency business as illegal financial activity.

According to Reuters, Democratic Senator Elizabeth Warren, a prominent critic of the cryptocurrency industry, is considered the leading candidate to chair the U.S. Senate Banking Committee following her party’s victory in the midterm elections. If appointed, she would have expanded authority to launch investigations and summon industry representatives to hearings.

Source link