Bitcoin News Today: Bitcoin ETF Exodus Sparks Debate: Capitulation or Cyclical Comeback?

Bitcoin faces a pivotal juncture as spot ETF outflows intensify, with the iShares Bitcoin Trust (IBIT) recording a $2.1 billion net outflow in November-the largest monthly drawdown since its January 2024 launch. This follows a $151 million net outflow on November 24, the most recent data point. Meanwhile, Ethereum spot ETFs attracted $96.6 million in inflows, signaling a shift in investor focus. The broader market context reveals Bitcoin trading at $87,080, down over 30% from October's record high of $126,000, marking its steepest two-month drawdown since mid-2022. Analysts attribute this correction to ETF redemptions, declining stablecoin liquidity, and institutional caution amid evolving macroeconomic expectations.

The Federal Reserve's potential December rate cut has introduced uncertainty. Market pricing indicates an 84% probability of a 25-basis-point reduction, which could reinvigorate risk assets. However, Fed officials have emphasized a "hawkish cut," suggesting easing without a clear dovish pivot. This nuanced stance has limited enthusiasm for high-beta assets like Bitcoin, which now trades with a correlation of 0.72 to the Nasdaq 100. Despite this, derivatives positioning shows pockets of optimism, including a $1.76 billion call condor on Deribit targeting a $100K–$112K rebound by year-end.

The market's liquidity challenges extend beyond ETFs. Stablecoin market capitalization has shrunk by $4.6 billion since November 1, while on-chain data reveals divergent behavior among Bitcoin holders. Mid-tier "whales" (wallets with 100–1,000 BTC) are accumulating at discounted levels, contrasting with large holders reducing exposure. This bifurcation mirrors pre-2020 base formations, though stabilization of ETF flows and sustained spot demand above $84,000 remain prerequisites for a sustained recovery.

Looking ahead, three variables will shape Bitcoin's trajectory: the Fed's December decision, ETF inflow normalization above $500 million weekly, and price defense of the $84,000 support level. While the asset's Sharpe Ratio nears zero and risk-adjusted returns deteriorate, historical precedents suggest late-cycle capitulation often precedes cyclical upswings. For now, Bitcoin's identity as a risk asset-rather than a macro hedge-remains intact, with its fate increasingly tied to global risk sentiment and institutional policy shifts.