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An illustration of Bitcoin. /Reuters-Yonhap

Bitcoin has recorded five consecutive weeks of declines and is trading around $75,000. Although it attempted to rebound above $80,000 following the U.S. midterm elections, it has since given up most of those gains amid a correction in U.S. technology stocks and outflows from spot Bitcoin exchange-traded funds (ETFs).

Market participants are watching whether Bitcoin can hold the $75,000 support level and how upcoming U.S. inflation data could affect its price movements.

According to cryptocurrency market tracker CoinMarketCap, Bitcoin was trading at $75,002 as of 2 p.m. Monday, down 4.93% from a week earlier. Over the weekend, it fell as low as $73,708, its lowest level since August.

Outflows from institutional investment products have added further downward pressure.

According to data compiled by Farside Investors, U.S. spot Bitcoin ETFs recorded combined net outflows of $1.2817 billion over the five trading days from Nov. 2 to Nov. 6.

On Nov. 2, the funds recorded net outflows of $398.6 million, followed by another $115.6 million on Nov. 3.

Fund flows briefly improved on Nov. 4, with net inflows of $74.6 million. However, outflows resumed, reaching $430.2 million on Nov. 5 and $411.9 million on Nov. 6.

The total marked the largest weekly outflow since late June. 

BlackRock's spot Bitcoin ETF, IBIT, was particularly hard hit.

The fund alone recorded net outflows of $403 million on Nov. 6. Given that total net outflows from U.S. spot Bitcoin ETFs reached $411.9 million that day, IBIT accounted for the vast majority of the withdrawals.

Although ETF fund flows alone cannot determine the market's direction, analysts say weakening institutional buying is undermining the demand needed to support a price recovery.

The correction in U.S. technology stocks has also dampened investor sentiment in the cryptocurrency market.

For now, market participants are closely watching whether the $75,000 level will serve as a key support zone.

Reuters previously suggested that Bitcoin could test a Fibonacci retracement level near $75,000, followed by its 200-day moving average of $73,188.

Conversely, analysts have suggested that Bitcoin would need to reclaim the $80,000 level and move above its 30-day moving average of $81,319 to ease the downward trend.

U.S. inflation data will also be a key market driver this week.

The U.S. Bureau of Labor Statistics (BLS) is scheduled to release the October Consumer Price Index (CPI) at 10:30 p.m. Korea time on Nov. 10. 

If inflation exceeds market expectations, investors could scale back their expectations for U.S. interest rate cuts, putting additional pressure on risk appetite.

Conversely, signs of easing inflation could revive expectations of rate cuts and provide some support for the cryptocurrency market.

Ultimately, Bitcoin may need improvements in both market demand and the broader macroeconomic environment to break out of its prolonged decline, including a slowdown in spot ETF outflows and reduced volatility in U.S. equities.

For now, whether Bitcoin can hold the $75,000 support level and the outcome of the U.S. CPI report on Nov. 10 are expected to be key factors determining its short-term direction.

                                                                                                             Kim Yoon-hee