As Bitcoin hovers near the $55,000 mark, experts are sounding alarms about a potential drop below $50,000, citing critical market indicators.
On Friday morning, Bitcoin was trading at $56,680, up 0.1%, after hitting a low of $55,282, according to CoinGecko data.
Ethereum was trading at $2,390 after a 0.1% drop.
The warnings from industry analysts come as Bitcoin and Ethereum ETFs continue to see significant outflows.
Bitcoin spot ETFs saw a net outflow of $211 million on Sept. 5, marking the seventh consecutive day of withdrawals.
Among the largest losses were Fidelity Wise Origin Bitcoin Fund FBTC, which had an outflow of $149 million, and Grayscale Bitcoin Trust GBTC, which lost $23.2175 million, according to data from SoSo Value.
The total net asset value of Bitcoin spot ETFs now stands at $50.727 billion.
Ethereum has also been impacted, with spot ETFs reporting a net outflow of $152,700, data showed.
Grayscale Ethereum Trust ETHE recorded a $7.3895 million outflow, although Grayscale Ethereum Mini Trust ETHUSD saw a small inflow of $7.2368 million.
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Analysts from 10x Research are pointing to troubling on-chain data.
They observed that a peak in the supply held by short-term holders in April 2024 resembled patterns seen at the end of the 2017 and 2021 bull markets.
Long-term holders, or whales, began selling into rallies as early as March 2024, which stifled demand and led to price consolidation.
“A drop below $50,000 for Bitcoin appears inevitable,” the analysts stated, highlighting that most traders remain unaware of the severity of the situation.
Broader economic factors are also adding pressure to the market.
Weak U.S. Manufacturing PMI data and ongoing political uncertainties are expected to drive declines in risk assets like cryptocurrencies.
“Even interest rate cuts may not ensure higher Bitcoin prices, especially when we’re seeing sharp declines in protocol revenues, which indicate reduced usage,” 10x Research noted.
As these market trends continue to unfold, they are expected to be a key focus at Benzinga’s Future of Digital Assets event on Nov. 19, where industry leaders will delve into the evolving dynamics of the cryptocurrency landscape and discuss how investors can navigate the challenges ahead.
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