Bitcoin (BTC-USD, Financial) extended its decline on Tuesday, falling 6.99% to $89,096.7 at 07:34 AM ET, as investor sentiment weakened following heavy outflows from U.S. Bitcoin ETFs and a drop in the CME futures premium.

On Monday, U.S. spot-listed Bitcoin ETFs saw their second-biggest outflows of the year, with $516.4 million withdrawn, according to Farside data. This marked the ninth net outflow in 10 days, reflecting growing uncertainty around Bitcoin, which had previously traded in a narrow range between $94,000 and $100,000 for most of the month.

Adding to the pressure, Bitcoin's CME annualized basis—the difference between spot prices and futures contracts—dropped to 4%, slipping below the risk-free rate of 5% for the first time. This signals waning institutional demand for the cash-and-carry trade, a strategy where investors profit from price mismatches between spot and futures markets. Bitcoin hit a low of $88,250 earlyTuesday, breaking out of its three-month trading channel, as institutional investors reassess their exposure amid shifting market dynamics.