Bitcoin fell below $70,000 on Friday, extending its recent decline as investor sentiment deteriorated amid institutional outflows, tightening liquidity and broader macroeconomic pressures.

Bitcoin (BTC) was trading at $68,607.23 at the time of writing, down 9.2% over the past week, according to CoinGecko.

The price drop coincided with a sharp deterioration in market sentiment. The Crypto Fear & Greed Index fell to 20 on Friday, its lowest reading in more than four months and a level classified as "extreme fear." The index last touched that mark on July 8. The gauge, compiled daily by Alternative.me from factors including volatility, momentum, social-media activity and Bitcoin's market dominance, runs on a scale of 0 to 100, with readings below 25 falling into the extreme-fear band.

Vikram Subburaj, CEO of crypto exchange Giottus, attributed Bitcoin's weakness to institutional outflows, tightening crypto liquidity and expectations of a December Federal Reserve interest rate hike. "Investors should avoid chasing short-term dips or using excessive leverage," he said.

In a Friday report, research firm 10x Research highlighted Bitcoin's divergence from US equities. Between Nov. 5 and Nov. 12, Bitcoin declined 5.9% while the Nasdaq 100 gained 6.4%, suggesting the cryptocurrency was responding more to rising Treasury yields and a stronger US dollar than to technology stocks.

The firm noted that Bitcoin was increasingly trading alongside gold, which fell 5.5% over the same period, as the US 10-year Treasury yield climbed above 5%.

Institutional trading platform Talos separately warned that thin liquidity and elevated leverage could amplify market volatility. Its weekly report showed Bitcoin order-book depth across major exchanges fell to $72 million on Nov. 9, roughly 33% below normal levels. Order-book depth — the value of buy and sell orders resting near an asset's market price — is a standard measure of how much trading a market can absorb without large price swings, and thinner depth means even modest orders can move prices by a wider margin.

"Liquidity remains thin while leverage stays elevated, leaving the market vulnerable to sharp moves in either direction," said Tanay Ved, senior research associate at Talos. "A rebuild in order-book depth and a turn in capital flows would provide a firmer foundation for recovery."

The selloff follows sustained withdrawals from US spot Bitcoin exchange-traded funds (ETFs), investment products that hold Bitcoin directly and whose daily flows are widely tracked as a gauge of institutional demand. BlackRock's iShares Bitcoin Trust (IBIT) recorded more than $2 billion in net outflows across nine consecutive trading sessions through Wednesday, while broader spot Bitcoin funds shed nearly $1.44 billion over five sessions. Net outflows occur when redemptions from the funds exceed new investment on a given day.

Preliminary data from Farside Investors showed a further $47.7 million in net outflows on Thursday, although figures for BlackRock and Fidelity were still pending at the time of reporting. Traders will be watching for those confirmed figures, along with the Federal Reserve's December rate decision, which Subburaj cited as one of the forces behind the current weakness.

Source: Cointelegraph