Bitcoin near $70,000: What should crypto investors do amid the ongoing sell-off

Detailed summary

Bitcoin slipped towards $70,000 and Ethereum fell below $2,000 amid institutional outflows, tighter US monetary policy concerns, and declining liquidity in crypto markets.

Bitcoin extended its decline on November 13, slipping towards $70,000 as institutional selling, concerns over tighter US monetary policy and weakness in global risk assets weighed on investor sentiment. Ethereum also traded below $2,000, while major altcoins, including Solana, XRP and BNB, recorded losses.

The sell-off reflects a combination of sustained ETF outflows, reduced liquidity in crypto markets and uncertainty over the Federal Reserve's interest rate trajectory.

US spot Bitcoin ETFs recorded nearly $300 million in net outflows on November 11, while Ethereum ETFs saw withdrawals of around $145 million. Bitcoin ETFs have witnessed approximately $1.44 billion in cumulative withdrawals over five consecutive sessions through November 11, according to estimates cited by Mudrex and CoinSwitch.

Vikram Subburaj, CEO of Giottus, said institutional outflows, tighter crypto liquidity and expectations of a December Federal Reserve rate hike were weighing on Bitcoin.

Stronger-than-expected US inflation has increased concerns that the Federal Reserve may maintain restrictive monetary conditions or consider another rate increase. Higher interest rates can reduce the appeal of riskier assets such as cryptocurrencies.

Investors are also watching the US Producer Price Index (PPI) data due on November 13 for further clues on inflation and the likely direction of monetary policy.

Purvang Mashru, Lead Analyst at BitDelta India, said Bitcoin and Ethereum's 30-day implied volatility had increased, indicating greater uncertainty about near-term price movements. Bitcoin's implied volatility rose from 38.74% to 39.95%, while Ethereum's increased from 54.68% to 56.06%.

Weakness in US technology stocks, particularly amid concerns over AI-sector valuations, has added to pressure on cryptocurrencies.

Prateek Gupta, Head of Business at Mudrex, said Bitcoin had fallen below its 200-day moving average near $73,100.

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