Bitcoin Tumbles Deeper Into Bear Territory, Hard-Won Rally Could Be On Verge Of Vanishing

Core Insights - Bitcoin has entered a deeper bear market, with a 22% decline from its early October peak, reaching a six-month low of $94,700 [1][4] - The sell-off is driven by a broader decline in risk assets, particularly tech stocks, amid investor concerns over high valuations [1][4] - Significant outflows from spot bitcoin ETFs reached $866.7 million, the highest since early August [2] - Bitcoin's liquidity has decreased, with market depth falling from approximately $766 million to $535.2 million, leading to increased price volatility [2] - Speculation regarding Strategy, the largest corporate holder of Bitcoin, offloading its holdings contributed to the sell-off, although the company's founder denied these rumors [3][4] - The net asset value premium of Strategy has dipped below 1x, indicating a temporary loss of premium over its Bitcoin holdings [4] Market Sentiment - The current state of Bitcoin reflects broader market sentiment towards risk assets, with fears of high valuations and decreased liquidity exacerbating the sell-off [4][5] - The volatile nature of cryptocurrencies is highlighted, emphasizing the impact of market sentiment on their value [5]