Bitcoin faces pressure as ETF demand cools: Analysts

Bitcoin’s recent slide below $90,000 has shaken a key narrative, that of growing institutional demand, crypto market analysts explain.

Summary

• Bitcoin is under pressure as low ETF demand cools the crypto markets
• $800 million in forced BTC liquidations shows excessive leverage
• Bitcoin is likely to stabilize at $89,000–$95,000 range

With Bitcoin falling below $90,000, markets are in a state of panic. A wave of futures liquidations, worsening exchange-traded funds outflows, and lower expectations of corporate buys have contributed to significant downward pressure on the Bitcoin price.

This has brought the crypto fear and greed index to extreme fear at 11 points. Still, according to several crypto market analysts, the drop likely does not reflect a broader structural collapse. Instead, the markets need time to recalibrate after an overheated first half of the year.

The crypto fear and greed index on November 20 | Source: Alternative

According to Jamie Elkaleh, Chief Marketing Officer at Bitget Wallet, the recent $800 million in forced liquidations points to excessive leverage in the crypto markets. While risk-off sentiment is affecting the broader markets, crypto is especially exposed.

“Equity markets are anchored by diversified earnings and macro stability, while crypto expresses stress more violently and more transparently,” Jamie Elkaleh, Bitget Wallet.

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Bitcoin to stabilize at $89,000–$95,000

Notably, according to the analytics team from the Bitcoin yield protocol, TeraHash, ETF flows remain a key barometer for Bitcoin’s (BTC) price. They point to the record $523 million outflow from BlackRock’s Bitcoin ETF as a sign of cooling demand.

“At the peak of inflows in late Q2, spot Bitcoin ETFs were drawing around $600–$700 million daily. Due to that, the price quickly broke above the $115,000 mark, eventually setting an all-time high above $126,000. So, ETFs are a direct reflection of the demand level,” TeraHash analysts.

Due to excessive leverage, whale profit taking, and lower expectations for corporate accumulation, Bitcoin is likely to stabilize at the $89,000–$95,000 range.

Read more: Bitcoin price below energy cost models as MVRV z-score sinks

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