Is the bear market in the cryptocurrency circle here? Bitcoin falls below $95,000, hitting a six-month low, with ETF withdrawals reaching $870 million in a single day

As expectations for a Federal Reserve rate cut in December rapidly cool, risk assets are experiencing heightened risk aversion, with Bitcoin falling to its lowest point in over six months on Friday, as investors withdrew nearly $900 million from Bitcoin ETFs.

On Friday, Bitcoin briefly dropped to $94,978, the lowest level since May 7. This decline marks the potential for Bitcoin to record a third consecutive week of losses, having fallen nearly 24% from its peak in early October. Meanwhile, the second-largest cryptocurrency, Ethereum, also dropped 1.5%, trading at $3,133.76.

According to media reports, Bitcoin ETFs saw a net outflow of approximately $870 million on Thursday, marking the second-largest single-day withdrawal since the launch of such products. According to Wall Street Insights, on November 13, the Fear and Greed Index in the crypto space plummeted to 15, the lowest level since February of this year. The last time this index fell below 20, Bitcoin dropped 25% in the following month.

The cryptocurrency market has remained under pressure following a $19 billion liquidation on October 10, which caused the total market capitalization of all cryptocurrencies to evaporate by over $1 trillion. According to CoinGlass data, liquidations are still ongoing, with over $1 billion in leveraged cryptocurrency positions being closed in the past 24 hours.

Volatility Amplifies Risk Asset Sell-off

The sell-off in the cryptocurrency market is highly correlated with other risk assets, but the declines are more pronounced due to its higher volatility. Max Gokhman, Deputy Chief Investment Officer at Franklin Templeton Investment Solutions, stated:

"The current sell-off is completely correlated with other risk assets, but the declines in cryptocurrencies are larger due to their higher volatility."

He pointed out that until institutional participation expands beyond Bitcoin and Ethereum, the beta coefficient of cryptocurrencies to macro risks will remain high. Market liquidity has also tightened significantly. According to Kaiko data, market depth—the ability of the market to absorb large trades without significant price fluctuations—has fallen by about 30% from this year's peak.

At the same time, due to the previous U.S. government shutdown delaying the release of key economic data, traders are questioning whether the Federal Reserve can justify a recent rate cut, and this reassessment is putting new pressure on higher-risk areas of the market.

Augustine Fan, a partner at SignalPlus, stated:

"Bitcoin has turned negative since President Trump took office, and the overall cryptocurrency market capitalization has completely retraced its gains for the year, with not much technical support between the current level and the $90,000 low, sentiment may remain subdued."

According to Nick Ruck of LVRG Research, in the options market, traders are increasingly positioning for volatility, with rising demand for neutral strategies such as straddles and strangles Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk