The number of bargain hunters is dwindling, Bitcoin is falling into a bear market! ETF withdrawals reached nearly $900 million, marking the second largest outflow in history.

With the recent wave of risk aversion sentiment sweeping through global financial markets, high-valued US tech stocks, cryptocurrencies such as Bitcoin, and other risky assets seem to be caught in a downward spiral. Investors have withdrawn nearly $900 million from ETF funds invested in Bitcoin, causing Bitcoin to further drop below the $100,000 mark, with the decline showing signs of deepening. These Bitcoin ETFs listed on the US stock market have been one of the hottest investment sectors in the global stock market this year. According to seasoned investors in the crypto community, the most crucial point in this current Bitcoin downtrend is not how strong the short-selling forces are, but rather the fact that the "blind followers" have mostly disappeared meaning the short-term speculators who used to buy Bitcoin are dwindling in numbers (also described as "collapse in top demand"). When there are not enough "followers" in the global cryptocurrency market, Bitcoin naturally plunges deeper once it breaks through the important $100,000 mark. The largest cryptocurrency asset, Bitcoin, dropped by as much as 2.8% on Friday, falling below $96,000 briefly before slightly narrowing the decline to hover around $97,070 per coin. However, it remains over 20% lower than the all-time high reached in early October, entering what is known as the "bear market zone." According to CoinGecko's data, the global cryptocurrency market is still under pressure after experiencing a forced liquidation scale of up to $19 billion on October 10th, erasing over $1 trillion in total market capitalization of all cryptocurrencies globally. According to CoinGlass, the trend of forced liquidation continues, with over $1 billion in leveraged cryptocurrency positions being forcefully liquidated in the past 24 hours. Meanwhile, ETF funds trading Bitcoin on the US stock market saw a net outflow of approximately $870 million on Thursday, marking the second-largest single-day redemption since its inception in January 2024. As shown in the above chart, US Bitcoin ETFs recorded the second-highest single-day net outflow in history. Earlier this week, the bullish rally sentiment brought about by the official end of the longest government shutdown in US history briefly pushed the US stock market higher, but it quickly fell back. Due to the similar trajectory displayed by US tech stocks and Bitcoin during times of risk aversion, cryptocurrencies collectively fell, with the decline in Bitcoin and other cryptos far exceeding that of the Nasdaq 100 index. As key economic data releases were significantly delayed, traders began to question whether the Federal Reserve had enough reason for interest rate cuts. This "reassessment process" in the market is putting new pressure on high-risk, overvalued tech stocks and extremely sensitive assets such as cryptocurrencies. Additionally, the market is concerned that with the end of the US government shutdown, various economic data including CPI and non-farm payrolls will be released in quick succession. If multiple data points do not meet market expectations, the selling pressure in this round of risk assets, including cryptocurrencies, may escalate further. "The current sell-off in cryptocurrencies such as Bitcoin is completely in sync with other risk assets, but due to the inherent volatility of cryptocurrencies, including Bitcoin, the decline in cryptocurrency assets is greater," said Max Gokhman, Chief Investment Officer of Investment Solutions at asset management giant Franklin Templeton. "Until deeper global asset managers expand beyond Bitcoin and Ethereum, the beta coefficient of cryptocurrency assets for macro risk will remain high." Liquidity in the cryptocurrency market has also significantly tightened. According to Kaiko's data, market depth the ability of the market to absorb large transactions without significant fluctuations has decreased by approximately 30% from its peak this year. The benchmark used to measure Bitcoin market depth above shows that trading volume within the 1% range of the median price has shrunk since the crash on October 10th. "As Bitcoin has turned negative in returns since Donald Trump's re-election as US President, and the total market capitalization of all cryptocurrencies has returned to its level at the beginning of the year, there isn't much technical support between the current position and the range just above $90,000. Emotions are likely to remain subdued until a new strong catalyst appears," said Augustine Fan, partner at SignalPlus. In the options market, traders focusing on cryptocurrencies are increasingly inclined to position themselves for volatile price movements. Nick Ruck, a senior analyst at LVRG Research, stated that there is rising demand for option strategies such as strangles and straddles that lean towards neutral hedging.