Bitcoin Plummets to Lowest Level Since October 2024, Raising Concerns Among Investors

Bitcoin's recent drop has left investors wondering if it's time to buy or sell. After hitting an all-time high in October, the cryptocurrency plummeted below $60,000 last week, its lowest level since October 2024. Analysts point to two main factors contributing to this decline: the breakdown of Bitcoin's two defining narratives and the sharp drop in ETF inflows.

For years, Bitcoin was touted as a safe-haven asset and a high-beta tech trade. However, these stories are no longer holding up. The 'digital gold' narrative, which suggested that Bitcoin would perform well during times of geopolitical stress, failed to deliver when the US-Israel-Iran war broke out in February. Meanwhile, the correlation between Bitcoin and tech stocks has collapsed, making it harder for investors to predict its price movements.

ETF outflows have also reached a record high, with U.S.-listed spot bitcoin ETFs losing $4.4 billion since mid-May. This decline raises concerns about the sustainability of Bitcoin's current price. While some analysts see potential support levels around $61,300 and $50,000, others believe that this could be a sign of a major bear market bottom.