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Bitcoin Updates: Bitcoin's Sharp Drop and ETF Outflows Trigger a Cycle of Self-Perpetuating Sell-Off in Crypto

Bitcoin Updates: Bitcoin's Sharp Drop and ETF Outflows Trigger a Cycle of Self-Perpetuating Sell-Off in Crypto

Bitget-RWA2025/11/24 09:54
By:Bitget-RWA

- Bitcoin fell to a seven-month low amid $3.79B ETF outflows in November, with BlackRock's IBIT and Fidelity's FBTC accounting for 91% of redemptions. - Analysts cite profit-taking, leveraged position unwinding, and Fed rate uncertainty as key drivers, while NYDIG highlights structural shifts like collapsing stablecoin supply and DAT premiums. - Citi Research links $1B in ETF outflows to a 3.4% Bitcoin price drop, pushing Bitcoin dominance to 58% as investors shift to riskier altcoins. - Despite bearish sh

Bitcoin dropped to its lowest point in seven months as U.S. spot

exchange-traded funds (ETFs) experienced unprecedented outflows, indicating a major shift in investment trends. NYDIG cautioned about "real capital flight" from the cryptocurrency sector. As of Friday, the asset was valued at $83,461, , representing a nearly 30% decline from its October high. The downturn has intensified as ETF inflows have reversed, resulting in net outflows totaling $3.79 billion in November—marking the worst monthly performance since these ETFs debuted in January 2024.

The largest funds have borne the brunt of these outflows. BlackRock's IBIT, responsible for 63% of all ETF redemptions this month, saw investors pull out $2.47 billion,

. Fidelity's FBTC followed with $1.09 billion in redemptions, . Experts by long-term investors, the unwinding of leveraged bets, and broader economic uncertainty ahead of the Federal Reserve’s December policy meeting.

Bitcoin Updates: Bitcoin's Sharp Drop and ETF Outflows Trigger a Cycle of Self-Perpetuating Sell-Off in Crypto image 0
Greg Cipolaro, NYDIG’s Global Head of Research, pointed to deeper underlying changes driving the selloff. In his analysis, he stated, "The forces that fueled the 2024–2025 rally have now reversed," . The company also , falling premiums for digital asset treasuries (DATs), and a shift in corporate treasury trades from premiums to discounts as evidence of liquidity leaving the market. For instance, after its price dropped below $0.65 on Binance.

This reversal has set off a feedback loop,

. ETF outflows are accelerating price declines, and as prices fall, fewer inflows occur, creating a self-perpetuating cycle. Citi Research , estimating that every $1 billion withdrawn from ETFs leads to a 3.4% decrease in Bitcoin’s price. This trend has , as investors move toward riskier alternative coins.

Although the short-term outlook appears negative,

. Still, Cipolaro warned that "the cycle, driven by flows, leverage, and reflexive behavior, is now exerting greater influence," urging investors to "remain optimistic, but be ready for adverse scenarios."

BlackRock’s IBIT highlighted the market’s vulnerability when it

, the largest since its inception. CoinShares , with Bitcoin ETFs making up $1.38 billion of that figure. At the same time, , signaling a rise in bearish sentiment.

Bitcoin’s recent decline has sparked discussion about whether the market is entering a bearish phase.

to previous corrections, such as the 2019 government shutdown, when Bitcoin fell 9% in five days before rebounding. However, the current environment is different: , shifting the focus from expansion to contraction.

As the crypto sector faces its toughest period since the FTX collapse in 2022, the debate continues over whether these outflows represent a temporary correction or a more fundamental shift. For now, Bitcoin’s price movements and capital trends point to the former, but the future—marked by volatility and investor fatigue—remains unpredictable.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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