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As Bitcoin dropped below $50,000, analysts expect more outflows that would potentially drive prices down to $42,000.
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Cryptocurrency assets started seeing significant outflows last week amid growing fears of a recession in the United States and geopolitical concerns, according to a new report by the crypto investment firm CoinShares.
The week of July 28 to Aug. 3 saw digital asset investment products posting outflows for the first time in four weeks totalling $528 million, CoinShares reported in its latest digital asset fund flows report published on Aug. 5.
CoinShares noted that the latest crypto sell-off is believed to be a reaction to fears of a recession in the US, geopolitical uncertainty and consequent broader market liquidations across the majority of assets.
Bitcoin saw outflows totaling $400 million
As the biggest cryptocurrency asset by market value, Bitcoin (BTC) led last week’s crypto outflows, which totaled $400 million, CoinShares’ data suggests. The sell-off marked Bitcoin’s first outflows after five weeks of inflows.
Ether (ETH), the second-largest cryptocurrency by market cap, posted $146.3 million in outflows last week, with Solana (SOL) seeing an additional $2.8 million in outflows.
On the other hand, multi-asset crypto investment products saw inflows of $18.1 million, with short-Bitcoin also seeing inflows of $1.8 million last week.
“Blockchain equities continued to see outflows, with last week seeing a further $18 million, in line with outflows from broad tech-related exchange-traded funds,” CoinShares stated.
Analysts expect more losses with Bitcoin dropping to $42,000
As CoinShares’ analysis covered the weekly period from July 28 to Aug. 3, it didn’t include the latest sharp decline across multiple markets on Aug. 4 and Aug. 5.
After losing the $69,000 support on July 29, Bitcoin continued to drop below $50,000 on Aug. 5, reaching its lowest price mark since February 2024.
According to data from CoinGecko, BTC is down 15.6% over the past 24 hours and is trading at $51,301 at the time of writing.
Following the market drop, 290,000 traders were liquidated in the past 24 hours, with total liquidations netting $1.1 billion, CoinGlass data indicated.
While industry advocates like Joseph Young suggested that the “bottom is nearing,” some analysts were less optimistic about the potential BTC price moves.
Related: Grayscale Ethereum ETF outflows exceed $2B
“Although Bitcoin has been in a gradual downtrend, marked by three tops and two bottoms, we anticipate the support line at $55,000 will break, potentially driving prices down to $42,000,” 10x Research CEO Markus Thielen wrote in the latest market update on Aug. 5.
According to the analyst, Ether (ETH) could further drop below $2,000. He added:
“While this may seem extreme to some, economic weakness, as indicated by our ISM report, ongoing weak market structure, on-chain data, and our cycle analysis suggest further stress ahead.”
Magazine: Ethereum price will lag for ‘months’ as Bitcoin surges: X Hall of Flame, Roman
This article first appeared at Cointelegraph.com News
