Bitcoin near two-month low as ETF outflows persist

Market comment on behalf of Ranim Turfa Head of Research and Market Analysis – MENA at Tickmill

Bitcoin edged lower on Thursday, remaining near a two-month low as institutional selling showed no sign of easing. Spot Bitcoin ETFs recorded net outflows of USD 300 million on Wednesday, marking a fifth consecutive session of withdrawals and bringing November’s total to over USD 1.88 billion. The retreat extends beyond Bitcoin. Spot Ether ETFs have drawn about USD 696 million in net outflows so far this month, signalling broader caution towards digital assets.

Markets now fully price in a Federal Reserve interest rate hike in December, while expectations of tightening by the European Central Bank and the Bank of England have also increased amid persistent inflation pressures and resilient economic data. A more restrictive global outlook reduces the appeal of non-yielding assets and could keep ETF flows under pressure.

Looking ahead, with the Democratic sweep in the midterms making supportive crypto legislation a distant prospect, Bitcoin’s direction will hinge on macroeconomic data in the near term. Today’s US jobless claims and Friday’s producer price data could set the tone. A hotter PPI reading alongside a robust labour market could reinforce expectations of tighter monetary policy and extend ETF outflows. Softer figures could help Bitcoin to stabilise.

Elsewhere, oil prices have held steady as markets await further developments in the Middle East. Renewed tensions in the Middle East could lift energy prices, revive inflation concerns and add to the pressure on Bitcoin, while easing tensions could improve risk sentiment and, if oil falls as well, temper inflation concerns.

Zaid Barem / ymm