Bitcoin price outlook: Sharp sell-off nears $70,000 support zone 

Bitcoin trades in 2 1/2 month lows

Bitcoin has suffered a sharp reversal following its brief post-US midterm election recovery, falling back towards its 200-day simple moving average (SMA) at $73,152.25 as a technology-stock rout, renewed ETF outflows and leveraged liquidations weigh on sentiment.

Bitcoin initially rallied after the US midterm elections, recovering above $80,000 and reaching around $81,000 on 4 November. However, the rebound quickly unravelled as investors turned against technology and AI-related stocks. Bitcoin subsequently fell below $75,000 on Friday, reaching its lowest level since August, before continuing to slide early this week.

The decline has erased the post-election gains and took Bitcoin below key technical support seen at the $74,977.57 mid-September low.

Bitcoin gives back its post-election rebound

Bitcoin initially benefited from the US midterm election result, recovering from its election-night weakness as investors reassessed the implications of a Democratic victory in both the House and Senate.

That optimism proved short-lived. Concerns over the potential for tighter cryptocurrency regulation were compounded by a sharp sell-off in technology stocks, with the Nasdaq falling 5.5% on Thursday as investors reassessed AI valuations and infrastructure spending. Bitcoin, which has increasingly traded as a risk-sensitive asset alongside technology shares, was dragged lower too.

The move was amplified by leveraged liquidations. Around $710 million of cryptocurrency positions were liquidated over a 24-hour period on Friday, including roughly $250 million of long Bitcoin positions. Thursday's broader crypto liquidations exceeded $1 billion.

The result has been a rapid reversal in Bitcoin's technical picture.

Bitcoin ETF outflows accelerate

US spot Bitcoin ETF flows have deteriorated sharply alongside the price decline.

The funds recorded a $398.6 million net outflow on 2 November, followed by another $115.6 million withdrawal on 3 November. There was a brief improvement on 4 November, when the ETFs attracted $74.6 million, but this was more than reversed by $430.2 million of outflows on 5 November and a further $411.9 million on 6 November.

That left total weekly outflows at around $1.28 billion, the worst weekly performance since late June. November's withdrawals have therefore accelerated rapidly after October ended with approximately $515 million of net outflows.

The scale of the recent withdrawals is important because it suggests institutional demand is not yet providing a reliable floor beneath Bitcoin. A sustained return to inflows would therefore be an important signal that the sell-off is losing momentum.

Bitcoin bearish scenario

The main risk is that the 200-day simple moving average (SMA) at $73,152.25 may give way. Two consecutive daily chart closes below it would likely provoke another bout of selling which may lead to the 9 April low at $70,477.90 and the psychological $70,000 region being hit.

Bitcoin bullish scenario

Were the recent Bitcoin sell-off to fade around the 200-day simple moving average (SMA) at $73,152.25, another up leg may be formed. For this to be the case, not only the September low at $74,977.57 but also the resistance area made up of the 23 August, 2 and 11 September and 30 October lows at $75,599.14-to-$76,232.63 would need to be overcome. If so a gradual rise towards last week's high at $81,057.98 may be at hand, an advance above which would favour the bulls once again and may push the $84,000 region to the fore.

Bitcoin daily candelstick chart