Bitcoin price continued its strong sell-off today, Nov. 14, its lowest level since May 8. BTC token moved to a low of $97,200, down sharply from the all-time high. This article explores the top reasons why the BTC price is crashing.
Bitcoin price crashing as ETF outflows rise
One reason why Bitcoin price is in a strong sell-off is that American investors have been selling their ETF holdings. Data compiled by SoSoValue shows that ETF outflows jumped to $869 million on Thursday after shedding $277 million a day earlier.
The cumulative ETF outflows this week stood at $622 million, lower than last week’s $1.25 billion and the previous week’s $798 million. This is a sign that many investors expect the price of Bitcoin to continue falling in the near term.
Large investors are selling BTC
Bitcoin price is also crashing as many big holders sell their coins. One reason for this is that these investors have lost their patience as the coin has continued to underperform the broader market. These investor have sold tokens worth over $45 billion in the past few months.
While Bitcoin is up by 10% this year, a similar investment in top indices like the Nasdaq 100 and S&P 500 would have generated a stronger return as these have jumped by over 20%. In a recent statement, a Bitfinex analyst said:
“The takeaway is that whales are not dumping in fear but gradually taking profits into a softer ETF demand environment. These rebalancing periods typically reset positioning and volatility before the next leg higher, once inflows and liquidity conditions improve.”
Bitcoin treasury trade falters
The other main reason for the ongoing Bitcoin price crash is that the Bitcoin treasury trade is faltering. Data shows that most companies that added Bitcoin to their treasuries are struggling.
Michael Saylor’s Strategy stock price has plummeted by over 50% from its highest level this year. Its market net asset value (mNAV) has plunged to near 1, meaning that investors are not willing to pay a premium.
Other companies like Semler Scientific, MetaPlanet, and KindlyMD have also lost their premium. The impact of all this is that these companies have largely paused their Bitcoin purchases. Some may even start selling soon to pay back their loans.
Futures open interest continues to plunge
Meanwhile, there are signs that investors are still shaken by last month’s liquidation, that cost investors billions of dollars. The main evidence for this is that the open interest has plunged to $66 billion, down sharply from the year-to-date high of over $94 billion.
Fallen open interest is a sign that investors anticipate the price to be much lower than where it is in the future. In most cases, crypto prices do well when the open interest is rising.
Bitcoin price technicals have contributed
Technicals on the daily and weekly chart have contributed to the ongoing Bitcoin price crash. The daily timeframe chart shows that the BTC price has formed a double-top pattern at $125,137 and a neckline at $107,028.
Worse, the coin is about to form a death cross pattern as the spread between the 50-day and 200-day Exponential Moving Averages (EMA) near their crossover.
The Average Directional Index (ADX) has continued rising, a sign that the trend is strengthening. Therefore, the most likely scenario is where Bitcoin price continues falling, potentially to the support level at $90,000.
Bitcoin has also formed more bearish patterns on the weekly chart. For example, it has formed a giant rising wedge pattern, which is made up of two ascending and converging trendlines.
Read More: Crypto crash today: why are altcoins like Uniswap, WLFI, Pepe Coin going down?
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