Due to investors withdrawing assets from US spot bitcoin exchange-traded funds (ETFs), Bitcoin (BTC-USD) has fallen almost 10% over the last five days and has traded below $65,000 in the last day.
Bitcoin Faces Worst Week Since 2022
As it approaches its worst week since 2022, the largest digital asset by market capitalization is currently at its lowest point since November 2024.
At the time of writing, Bitcoin (BTC-USD) was still below $70,000 (£51,419) despite a small recovery on Friday afternoon.
Trump Rally Influence and Price Drop
This week’s selling led to Thursday night’s lows, resulting in a more than 50% drop in bitcoin from its peak of over $126,000 last October. Coinciding with the price increase was President Donald Trump’s victory on a platform that supported cryptocurrency.
Scott Bessent, the US Treasury secretary, suggested that his government would not support the Bitcoin, which affected its price this week amid generally negative mood in tech markets.
ETF Outflows and Market Impact
As investors withdraw money from spot bitcoin (BTC-USD) exchange-traded funds (ETFs), such as those run by BlackRock (BLK), there is a sell-off.
NasdaqGM: Nasdaq Current Price in USD
(IBIT) 39.46 + 3.36 + 9.31 percent
Market open as of 11:39:52 GMT-5.
US spot bitcoin (BTC-USD) ETFs saw $545 million in net outflows on Wednesday, according to data from SoSoValue.
With $373 million in net outflows, BlackRock’s spot bitcoin ETF, IBIT, was the top seller. While XRP (XRP-USD) spot ETFs saw total net inflows of $4.83 million, spot ethereum (ETH-USD) ETFs saw total net outflows of $79.48 million.
Investor Behavior and Macro Trends
Market participants claim that rather than being a shock unique to cryptocurrencies, the decline is a reflection of a larger change in investor behavior. The global economic backdrop “feels less like a slowdown and more like fragile resilience,” according to Wenny Cai, COO at Synfutures, who spoke to Yahoo Finance. Growth is still evident on paper, but investors are growing more defensive.
Cai said that as focus shifts to policy uncertainty, changes in the US Federal Reserve’s leadership, and inflation that is still above goal, the AI-led investment boom that bolstered risk assets last year is no longer providing the same level of safety.
Gold (GC=F) has emerged as the “clearest indication of risk aversion” as a result of capital shifting into conventional safe havens.
CoinMarketCap USD (CCC)
2,034.89 +52.87 (+2.67%) (ETH-USD)
at 16:37:00 UTC. The market is open.
Deleveraging and Balance-Sheet Mechanics
This shift in attitude is having a direct impact on cryptocurrency prices. As packed positions created during the post-ETF surge are unwound, Cai observed that the decline of bitcoin (BTC-USD) below the low-$70,000 area “has exacerbated a larger deleveraging.” More liquidations have occurred, sentiment has shifted away from risk, and balance-sheet mechanics—rather than bullish narratives—are now driving price action.
💹 Bitcoin ETF Outflows This Week
- Total Net Outflows: $545 million
- Top ETF: BlackRock IBIT $373 million
- Ethereum ETFs: $79.48 million net outflow
- XRP ETFs: $4.83 million net inflow
- Market Impact: Accelerated deleveraging and risk-off sentiment
Frequently Asked Questions
1. Why has Bitcoin dropped this week below $70,000?
Macroeconomic uncertainty, investor retreat from US spot Bitcoin ETFs, and a move away from riskier assets toward safer ones like gold were the main causes of the decline in Bitcoin. US Treasury officials’ remarks indicating no cryptocurrency bailouts also contributed to the sell-off.
2. Which Bitcoin ETFs saw the biggest withdrawals?
In terms of net outflows, BlackRock’s spot Bitcoin ETF (IBIT) led with $373 million. Significant withdrawals from other US spot Bitcoin ETFs also contributed to the drop in price.
3. Is there a connection between this decline and problems unique to crypto?
Not totally. Analysts point out that rather than being the result of a single crypto-specific shock, the move reflects broader investor behavior, including defensive positioning brought on by policy uncertainty, Fed leadership changes, and inflation.
4. What is the difference between this and the past highs of Bitcoin?
The price of Bitcoin is currently below $70,000, which is more than 50% down than its peak of over $126,000 in October of last year, when the “Trump rally” in cryptocurrency occurred.
5. What is currently influencing investor behavior?
Investors are shifting their money from risky assets to more conventional safe havens like gold. In cryptocurrency markets, the unwinding of packed positions created during the post-ETF rise has sped up liquidations and created a risk-off attitude.
⚠️ Bitcoin Market Risk & Sentiment
- Investor Concern: Defensive positioning due to Fed policy & inflation
- Liquidations: Accelerated due to unwinding of crowded positions
- Price Drivers: Balance-sheet mechanics over bullish narratives
- Safe Haven Rotation: Capital moving into gold
- Market Mood: Risk-off sentiment dominating crypto markets
Conclusion
Due to investor rotation into safer assets and broader macroeconomic caution, Bitcoin is seeing its largest weekly loss since 2022. Although last year’s “Trump rally” gave the market a brief lift, the mix of macro uncertainties, legislative uncertainty, and ETF withdrawals has made the crypto landscape difficult. As balance-sheet mechanics dominate price movement rather than bullish narratives, traders and investors are becoming more and more concerned with risk management.
Disclaimer: Cryptocurrency markets are highly volatile. The content is for informational purposes only and not financial advice.
