Bitcoin extended its selloff early Thursday, falling to $63,000 for the first time since February 24. The cryptocurrency has lost over 14% this week alone and 21% over the past four weeks, according to CoinDesk data.
Implied Volatility Hits Highest Since April
The selloff has triggered demand for protective options plays, pushing the 30-day implied volatility index BVIV to 53.17, its highest level since April 2. The gauge is often seen as a fear indicator in the crypto market.
ETF Outflows Continue for 13th Straight Day
Investors yanked another $50 million from U.S.-listed spot ETFs on Wednesday, marking the 13th consecutive trading day of outflows from these vehicles, which are viewed as a proxy for institutional demand. The sustained outflows have added to market pressure.
“A broad sell-off in crypto, which started with Strategy's transfer triggering ETF outflows and is now fueled by speculative news about Mt. Gox liquidations, signals a potential continued sell-off. BTC at $50k is a level some are starting to talk about as a bottom this year,” said Paul Howard, senior director at liquidity provider Wincent, in an email.
“Whilst there is a long way to go, the absence of catalysts and the movement of liquidity into other tech sectors such as AI indicate we have further volatility ahead,” he added.
Some traders are closely watching levels around $60,000 as potential support. The February crash saw prices nearly test that level on some exchanges before the sell-off ran out of steam.
“The first major zone I’m watching is the low $60k region, because that is where a lot of important pieces start coming together. We have the local low around $59.9k. We have the 200-week moving average now sitting in that same general area,” analysts at data tracking platform Material Indicators said in an email.
“That does not guarantee support. It simply tells us this is where the market should have to make a decision,” they added.