The market is heading toward a painful milestone. For the third week in a row, billions are flowing out of major crypto funds. The decline comes after weeks of turmoil, falling prices, and investors taking profits. Increasing signals suggest we may be leaving the bull market behind.
According to the Kobeissi Letter, over $2 billion left crypto funds last week alone. In three weeks, the total outflow exceeds $3.2 billion. This is the largest outflow since February and indicates a market struggling to maintain confidence.
Bitcoin and Ethereum Hit Hardest #
The biggest losses are seen in Bitcoin and Ethereum. Bitcoin experienced an outflow of about $1.4 billion, while Ethereum lost around $689 million. Many investors continue to sell, further increasing pressure on prices.
Due to the combination of outflows and price declines, the total value of all crypto funds has dropped by 27% to $191 billion. Analyst Lark Davis points out that Bitcoin remains well below its 50-week exponential moving average, a key indicator for long-term trends. As long as the price stays below this average, we are in a bear market, according to him.
Davis sees several possible scenarios for the coming weeks. He does not rule out a short-term rally but mainly expects Bitcoin to reclaim the 50-week average by the end of the year if interest rates and economic signals improve.
Meanwhile, Jacob King warns that Strategy, Michael Saylor’s company, could face trouble if the price falls below their average purchase price of $80,000. This could even lead to forced sales and further declines, he says.
Bitcoin Funds in the Red, but Hope for Rate Cut Grows #
The pain is also evident in U.S. funds. The average price at which ETF investors bought Bitcoin is around $89,600. Due to the recent drop, many of these investors are now at a loss for the first time. BlackRock, ARK 21Shares, and Bitwise saw hundreds of millions in outflows combined.
Meanwhile, hope is growing for a rate cut by the U.S. Federal Reserve on December 10. According to CME data, 71% of investors now believe this will happen. Crypto trader Moritz already sees a slight recovery, and analyst Jesse Eckel calls the long-term situation exceptionally positive.
Although the market is deep in the red now, the outlook need not remain bleak. If interest rates actually fall and macroeconomic pressure eases, the red weeks could easily turn green again.