Bitwise said bitcoin has entered “fire-sale” territory after the price slid below $75,000, triggering heavy capital outflows and extreme bearish sentiment.
Bitcoin fell to a year-to-date low of about $74,555, marking a roughly 40% drawdown from its all-time high as global bitcoin exchange-traded products recorded around $1.35 billion in weekly net outflows.
“Signalling fire-sale valuations for bitcoin,”
Bitwise said, pointing to the two-year rolling MVRV z-score falling to its lowest level on record.
The firm’s Cryptoasset Sentiment Index also dropped to levels last seen during the October 2023 liquidation crash, with just two of 15 indicators remaining above their short-term trend.
Outflows were led by US spot bitcoin ETFs, including sizable weekly withdrawals from the Grayscale Bitcoin Trust and the iShares Bitcoin Trust.
Despite the bearish backdrop, Bitwise noted that bitcoin’s daily relative strength index has fallen into a zone that has historically preceded short-term rebounds of about 10%.
Analysts added that improving spot buying activity and reduced leverage suggest bitcoin may have formed a local low near $74,500, setting the stage for a potential relief rally.
At the time of reporting, Bitcoin price was $78,853.50.