The U.S. market has seen significant outflows from Bitcoin exchange-traded funds (ETFs) this week, with more than $300 million pulled from these funds as global economic events continue to fuel uncertainty over the future of the cryptocurrency market.
Spot Bitcoin ETFs, which track the price of the cryptocurrency directly, have faced a tumultuous start to October. Between October 1 and October 3, a staggering $388.4 million was withdrawn from 12-spot Bitcoin ETFs. This shift occurred amid rising geopolitical tensions between Iran and Israel, leading to a weekly price low of $60,047 for Bitcoin.
Market analysts attributed this sharp decline to broader macroeconomic concerns, noting that geopolitical instability typically triggers risk-averse behaviour in global markets, including the volatile cryptocurrency space.
Short-Term Relief, But Long-Term Concerns Loom
On October 4, the U.S. market received a temporary boost from better-than-expected payroll data, allowing Bitcoin to briefly recover to $62,000. This recovery was accompanied by $25.59 million in fresh ETF inflows, a welcome sign for investors who had been rattled by the recent downturn.
Despite this modest rebound, the damage from earlier in the week remained significant. A total of $301.54 million flowed out of Bitcoin ETFs, leaving the market in negative territory for the first week of October, according to data from SoSoValue.
The volatility has sparked concerns among analysts. Ali, a well-known cryptocurrency expert, warned that Bitcoin is currently trading below the realized price for short-term holders, which stands at $63,000. This price represents the average cost at which short-term investors purchased their Bitcoin, and when the market dips below this level, investors often sell to minimize their losses. Ali cautioned that this could lead to a “cascading sell-off,” further exacerbating downward pressure on Bitcoin’s price.
Analysts Eye Key Price Levels for Bitcoin’s Next Move
While Ali warned of the potential for further losses, other analysts remain cautiously optimistic. Crypto analyst Immortal highlighted $64,000 as the key short-term resistance level. If Bitcoin can break through this barrier, it may trigger a strong bullish rally.
In the longer term, many experts continue to express optimism about Bitcoin’s prospects. Citing historical patterns of strong Q4 performance, coupled with expectations of potential U.S. interest rate cuts, several market watchers believe Bitcoin could surge toward the $72,000 mark before the end of the year, despite the current volatility.
As of now, Bitcoin is trading just above $62,200, reflecting a more than 5% drop over the past week.
Bitdeer Reports Sharp Decline in Bitcoin Production
In a separate development, Bitcoin mining firm Bitdeer has reported a steep decline in its self-mined Bitcoin production. The company revealed that it mined just 164 BTC in September 2024, a significant drop compared to the 482 BTC it produced during the same period in 2023—a 66% year-over-year decrease.
Despite this downturn, Bitdeer is pushing ahead with its efforts in mining rig manufacturing and research and development. In an October 3 press release, the firm confirmed that it is on track to mass-produce its SEALMINER A1 machines by the fourth quarter of this year. These machines are expected to add 3.4 exahashes per second (EH/s) to its proprietary hashrate.
The company also highlighted the progress it has made with its SEAL02 chip, which recently completed its first production phase with an energy efficiency of 13.5 joules per terahash (J/TH). This development, Bitdeer says, will help meet the evolving needs of the mining industry.
Linghui Kong, Bitdeer’s chief business officer, said the firm is confident that Bitcoin miners are seeking “more diversified technology solutions and supply chain flexibility” as the market evolves. The company’s second-generation chip will power the SEALMINER A2 mining machines, which are set to go into mass production by the end of 2024.
Despite its challenges, Bitdeer remains committed to expanding its infrastructure, with major projects underway in Texas, Norway, and Bhutan.
As global market conditions continue to shift, investors and industry players alike will be keeping a close eye on Bitcoin’s price movements and the evolving dynamics of the ETF and mining sectors.