Bitcoin downturn deepens… October large-scale liquidation aftermath, ETF outflows, and worsening liquidity coincide

Bitcoin (BTC) has continued its bearish trend, falling further below $100,000. Analysts say that heightened market-wide risk-off sentiment combined with short-term liquidity deterioration has amplified downward price pressure.

On the 14th (local time), Bloomberg reported that Bitcoin at one point slipped below $96,000, down 2.8% on the day. This is more than 20% below the record high set in early October.

The fallout from the large $19 billion liquidation that occurred on the 10th of last month is still ongoing. According to data from CoinGecko and CoinGlass, that liquidation evaporated more than $1 trillion from total crypto market capitalization, and over $1 billion in leveraged positions were also liquidated in the following 24 hours.

ETF flows are also supporting the weak trend. U.S. Bitcoin ETFs saw about $870 million in net outflows in a single day yesterday, marking the second-largest daily outflow since launch.

The U.S. stock market, which had briefly rebounded after the U.S. government shutdown was lifted, turned weak again due to delays in economic data releases and uncertainty over the Fed's interest-rate policy. Bloomberg interpreted this contraction across risk assets as showing a high degree of correlation with Bitcoin.

Max Gokhman, Deputy Chief Investment Officer (CIO) at Franklin Templeton Investment Solutions, said, "This sell-off is showing a high correlation with other risk assets," adding, "However, crypto assets have greater volatility, so the magnitude of the decline is relatively amplified." He analyzed, "Until institutional participation expands beyond Bitcoin and Ethereum into other asset classes, sensitivity to macro risk will remain high."

Liquidity indicators have also deteriorated. According to crypto analytics firm Kaiko, Bitcoin's 'market depth' (order volume absorbable within a 1% price range from the mid-price) has decreased by about 30% compared with early October.

Augustin Fan, a partner at SignalPlus, assessed, "Since President Trump's inauguration Bitcoin has turned negative year-to-date, and in the short term there are not many clear technical support levels until the low $90,000s," adding, "Market sentiment is likely to remain subdued for some time."

There was also analysis that positions targeting increased volatility are rising in the options market. Nick Luck, an LVRG research analyst, said, "Demand for volatility-focused strategies such as strangles and straddles in the options market has increased recently."