Severe fluctuations hit Bitcoin as outflows from ETF funds continue

The price of Bitcoin briefly fell below the $66,000 level during trading on Tuesday evening, before trimming its losses slightly to trade at slightly higher levels, amid ongoing uncertainty in global financial markets and increasing selling pressure.

The largest cryptocurrency in the world dropped to nearly $65,400, before rising again to around $67,061, according to data from CoinMarketCap, in a movement that reflects the continued sharp volatility in the Bitcoin market.

Meanwhile, U.S. Bitcoin exchange-traded funds (ETFs) recorded net outflows of $519.2 million on Tuesday, continuing a streak of outflows for the twelfth consecutive day, which added additional pressure on Bitcoin's performance in the spot market.

Outflows have also extended to Ethereum funds, reflecting a general risk-reduction sentiment in the digital asset market, amid weak liquidity and increasing caution from investors towards Bitcoin and similar assets.

Analysts believe that the recent decline in Bitcoin is a result of a combination of large buy position liquidations, a decrease in risk appetite, as well as the impact of geopolitical tensions that pushed investors towards safe-haven assets, increasing the selling pressure on the cryptocurrency market.

Some analysts also noted that the market is still absorbing a limited sell-off from Strategy, a Bitcoin-related firm, even though the volume was relatively small, it contributed to increasing the sensitivity to any negative news related to Bitcoin.

Conversely, research reports expect continued pressure on the Bitcoin market in the short term with persistent outflows, before any signs of market stabilization or gradual return of liquidity appear in the coming weeks.