Bitcoin drops below $77K amid strong ETF outflows, macro headwinds

Bitcoin dropped below $77,000 after rejecting the 200-day moving average around $82,000, as tightening macroeconomic conditions weighed on risk assets.

Hotter-than-expected US inflation data, with CPI at 3.8% year-over-year, alongside rising oil prices and a climb in 10-year Treasury yield, have reduced expectations for Federal Reserve (Fed) rate cuts. Markets are now increasingly pricing in the possibility of a rate hike by December, adding pressure to crypto markets.

Bitcoin's 200D MA rejection revives bear market concerns

Bitcoin historically rallied toward the 200-day moving average before reversing sharply in 2014, 2018 and 2022, with the level often marking local tops, according to K33 Research. These periods were characterized by rapid recoveries that rebuilt leverage, followed by aggressive sell-offs driven by deleveraging.

"That pace rebuilds risk appetite, allows leverage to surge, and leaves the market structurally vulnerable to explosive setbacks. A core ingredient in the ensuing legs lower was the unwind of positions built up during the rally itself, fueling aggressive sell-offs," the report stated.

However, the current cycle presents notable differences, with Bitcoin taking longer to revisit the 200D MA. The top crypto spent 189 days between breaking below the level in November and retesting it in May, compared with 96 days in 2014, 132 days in 2018 and 85 days in 2022.

Derivatives data further supports this view. Funding rates have remained negative for 81 consecutive days, while options skews are near yearly highs, signaling persistent defensive positioning among traders rather than speculative excess.

K33 stated that its internal regime framework aligns the current environment more closely with stronger market phases, such as March–April 2025, rather than with classic bear-market rallies.

"We maintain our view that the less aggressive bull market of 2025 sets the stage for a more moderate bear market in 2026, with our base case staying that $60k in February marked this cycle's maximum drawdown," the firm added.

Market structure and institutional flows present a more mixed picture. Global Bitcoin exchange-traded products (ETPs) recorded their largest weekly outflow of the year last week, totaling 24,303 BTC, marking the ninth-largest five-day outflow since the launch of US spot BTC ETFs.

K33 noted that outflows intensified as Bitcoin approached the average cost basis of ETFs, a level historically associated with elevated selling pressure. At the same time, Strategy purchased 24,869 BTC, partially offsetting the huge sell-off.

Broader market indicators remain subdued, with spot trading volumes averaging $2.7 billion daily and volatility near yearly lows.

While longer-term tailwinds such as the advancement of the CLARITY Act appear to be building, near-term direction remains tied to macro developments and liquidity conditions, the report stated.

Crypto trading firm Wintermute echoed a similar sentiment, reporting that Bitcoin declined 5.7% last week while Ethereum (ETH) fell 10.2%, alongside approximately $1 billion in Bitcoin ETF outflows that snapped a six-week inflow streak.

The firm attributed Bitcoin's earlier move above $82,000 primarily to leverage and short covering rather than sustained spot demand, noting that institutions were "selling into strength."

Bitcoin is trading at $76,800 at the time of publication on Tuesday, down 0.2% over the past 24 hours.