The Bitcoin ETF has seen a record $2.7 Billion in outflows this week, signaling an impending bear market. Corporate Bitcoin holders are feeling the pain, and liquidations are surging across the cryptocurrency industry.
Additionally, the Atlanta Federal Reserve has forecast a 1.5% decline in US GDP in Q1 2025, further fueling economic pessimism.
Is Bitcoin Heading for a Bear Market?
The US spot Bitcoin ETF market grew rapidly in its first year, but is now experiencing massive outflows. Earlier this week, it set a new record for outflows, nearing $1 Billion. The majority of this week's data reflects growing concerns among institutional investors.
Over the past week, the Bitcoin ETF recorded $2.7 Billion in net outflows, signaling fears of a bear market. For comparison, this is the largest weekly net outflow since March 2024.
Fear of a bear market is engulfing the entire cryptocurrency space, impacting corporate Bitcoin holders as well. MicroStrategy recently invested around $2 Billion in BTC, but this has not helped its stock price.
According to trading data today, it has fallen 57% since last November. Meta Platforms is down 54% from its all-time high, and Tesla is also declining. All these companies hold massive amounts of Bitcoin.
While Bit may be taking the brunt of this potential bear market, liquidations are surging across the cryptocurrency sector. Recent data shows around $1 Billion was liquidated in the past 24 hours. Traders are currently exhibiting extreme fear, the lowest level since the FTX collapse in 2022.
Some prominent figures are seeing a silver lining. Michael Saylor has urged the community not to panic sell, saying "Sell your kidney, but hold your Bit".
Arthur Hayes, the former CEO of BitMEX, has recently revised his prediction that BTC will rebound after a decline. However, he still believes Bitcoin will bounce back after a bear market.
"We are making lower lows in the current wave. I wanted to add risk this morning, but seeing this price action, I think we'll have one more violent drop below $80,000 over the weekend. Then it will be quiet for a while. Hang in there!" Hayes stated on social media.
Ominous economic signals have been emerging for days, and a market correction seems inevitable. This afternoon, the Atlanta Federal Reserve claimed that US GDP will decline by 1.5% in Q1 2025.
Even unfounded rumors can cause significant problems. Overall, the current macroeconomic factors are pointing to a short-term bearish cycle for Bit and the broader market.
