Bitcoin gives up gains as sentiment sours

Bitcoin traded around $90,400 on Coinbase on Tuesday morning, erasing all gains made since April. The asset has dropped 14% in the last seven days and briefly fell below $90,000 earlier in the session.

Major altcoins followed the same pattern. Ether fell 15%, XRP dropped 14%, BNB slipped 8% and Solana lost 18% over the week.

The Fear and Greed Index slid to 15 out of 100, reflecting the same level of caution seen during Trump’s Liberation Day shocks in April.

Spot Bitcoin ETFs recorded another day of net withdrawals on Monday, with $255 million leaving the products, according to Farside Investors. This follows three consecutive weeks of outflows.

MN Fund CIO Michaël van de Poppe said on X that Bitcoin’s failure to hold the ninety-four thousand dollar region opens the door to a search for lower support levels. He pointed to the CME gap as a potential target and said volatility is likely to remain elevated ahead of a heavy macro data week.

Global equities mirror risk-off tone

Traditional markets continued to adjust to fading expectations of a further Federal Reserve rate cut this year. The S&P 500 is down 2.4% in November, its weakest month since March. The Nasdaq Composite has fallen 4.3%.

In Europe, the FTSE 100 is relatively steady at minus 0.4% while the EuroStoxx 50 has slipped 1.7%. Japan has seen sharper moves with the Nikkei down 6.9%. Hong Kong’s Hang Seng is flat at minus 0.01%.

Gold has been stable for most of the month, but is down 4.3% over the last week.

Data vacuum, Fed divisions weigh on sentiment

Investors have been operating with limited visibility due to the absence of US economic data during the forty three day government shutdown, which ended last week. Non-farm payrolls are due on Thursday and are expected to reset market expectations.

The Federal Reserve remains split ahead of the December FOMC meeting. According to CME’s FedWatch tool, the probability of another rate cut this year fell to 48.5% on Tuesday, down from 67% a week ago and over 93% one month earlier.

Citi Head of Macro Strategy Dirk Willer told Yahoo Finance that Bitcoin’s downturn reflects several forces.
He cited sustained ETF outflows since early October, trend following behaviour among institutional investors after key moving averages broke, and a sharp decline in liquidity as US bank reserves fell by roughly $500bn due to a rebuild of the Treasury General Account.

Willer said liquidity should improve into the year-end if the TGA stabilises or declines.

Additional market factors

Yassine Elmandjra noted that onchain activity is not a reliable indicator in the current environment and flagged concerns around an emerging AI equity bubble, which has weighed on large-cap tech stocks and, by extension, crypto assets that tend to track tech performance.

He also pointed to the renewed yen carry trade. Investors borrowing in yen and swapping into US dollars have pushed up demand for the Japanese currency as yields move, adding another layer of volatility across global risk markets.