Bitcoin Price Flirting With $55,000 As ETFs See Seventh Day Of Expenditure

Bitcoin fell to $55,000 on Friday morning, with experts warning that it could fall to $50,000.

of The price of Bitcoin It fell to $55,363, down 1% on the day, before returning to trade at its current price of $56,125, according to data from CoinGecko — reflecting broader market volatility and reduced risk appetite among investors.

Market analysts have pointed to a combination of factors, continued ETF inflows, broader economic concerns and technical indicators, suggesting that Bitcoin may be poised for a more significant correction in the near term.

While some see the current volatility as an opportunity, the prevailing sentiment appears to be cautious, with the Crypto Fear and Greed Index falling to 22, indicating “extreme fear” among investors.

Bitcoin ETFs post seven-day outflows

Bitcoin's decline comes against a backdrop of significant withdrawals from cryptocurrency ETFs.

Bitcoin spot ETFs experienced a total net outflow of $211 million on Sept. 5, marking the seventh straight day of outflows and the largest outflow since June, according to data from Soso Value.

Fidelity's FBTC was the biggest loser of the day, losing $149.5 million on September 5, while Bitwise (BITB) and Grayscale Bitcoin Trust (GBTC) ETFs lost $30 million and $23.2 million, respectively. The current total net asset value of Bitcoin spot ETFs is $50.727 billion.

Ethereum ETFs also scored high on September 5 with total net outflows of $152,700. In particular, the Grayscale (ETHE) ETF experienced a net inflow of $7.3895 million in one day. However, surprisingly, Greyscale's mini ETF (NYSE: ETH ) bucked the trend with a net inflow of $7.2368 million on the same day, data shows.

Speaking to DeCrypt, David Morrison, market analyst at FCA-regulated TradeNation, pointed to wider market changes affecting crypto prices, pointing to a significant drop in risk appetite this week.

“Investors seem particularly nervous ahead of today's US non-farm payrolls report and next week's inflation outlook, with the Fed's rate decision due on September 18,” he said.

Nervousness in the market is best evidenced by actual liquidity.

According to data from Coinglass, the past 24 hours saw $98.58 million in liquidity on the crypto market, with long positions weighing in at $74.11 million.

Andy Lean, a blockchain consultant at the United Nations, predicted that Bitcoin would drop below $55,000 this week and continue to decline to around $50,000.

Tying this forecast directly to ETF inflows, “The decline began on August 30th as it struggled to hold above $60,000. This is when we see significant ETF inflows.”

Raj A. Kapoor, founder of the Blockchain Governance Council, sees several factors in the current market dynamics.

“I see a spark that's going to burn Bitcoin as Nvidia stock drops following the US subpoena,” Kapur said.

He explained the current negative sentiment of the crypto market, which has worried investors, but now the bottom has fallen out, at least for the time being. “Bitcoin's current support level is on thin ice and I already see the bottom going down to 50k or below,” he said.

“Any decline is a hiding opportunity and investors should closely monitor the critical support levels of $56,000, $47,000 and $40,000,” he pointed out, “A move higher than this and above would indicate a reversal.”