Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin’s price dipped below $100,000 for the third time this month on Thursday, as investors sold off risk assets, including cryptocurrencies and tech stocks, amid broader economic concerns. The downturn was exacerbated by significant outflows from U.S. Bitcoin and Ethereum exchange-traded funds and macro uncertainties stemming from a U.S. government shutdown and the Federal Reserve’s hawkish monetary policy.
Bitcoin’s Volatile November
The largest digital coin recently traded around $99,611, marking a more than 2% decline over 24 hours. This follows previous drops below the $100,000 threshold on November 4 and November 7. While Bitcoin had achieved a new record price of $126,080 in October, persistent worries about jobs data and a potential economic slowdown have exerted consistent downward pressure.
Dilin Wu, a research strategist at Pepperstone, indicated that while Bitcoin could still reach new highs in the medium term, short-term volatility is to be expected. Wu highlighted a reduction in institutional participation and whale activity, alongside ongoing ETF outflows, as factors hindering a sustained rally.
ETF Outflows and Macro Headwinds
U.S. Bitcoin and Ethereum exchange-traded funds have experienced substantial redemptions, with investors pulling a combined $2.6 billion in assets over the past week. Bitcoin funds alone saw over $1.9 billion leave, while Ethereum counterparts lost $718.9 million since October 29, according to data from Farside Investors. These outflows have significantly contributed to the downward price pressure on the leading cryptocurrencies.
Daily liquidations of crypto positions recently totaled $501 million, with Bitcoin accounting for approximately $165 million. Notably, long positions—bets on price increases—represented about $380 million of these liquidations, indicating a market caught off guard by the downturn.
Conflicting Market Sentiment
Despite the recent dips, some market participants maintain a bullish outlook. Users on Myriad Markets, a prediction platform, assign Bitcoin a 59% probability of reaching $115,000 before falling to $85,000. Joe DiPasquale, CEO of crypto fund manager BitBull, also expressed optimism, stating that Bitcoin remains in an uptrend due to consistent higher lows and strong buyer defense at support levels.
In the broader altcoin market, Ethereum was down by 5%, trading near $3,265, and Solana saw a 3.5% decline to approximately $148. In contrast, XRP recorded a 0.5% gain, priced at $2.36, following news that a spot ETF for the asset commenced trading on Thursday.
Government Shutdown Adds Uncertainty
Macroeconomic factors also played a role in Bitcoin’s Thursday decline. The U.S. government recently reopened after its longest shutdown, with President Trump signing a funding bill. However, the White House had blamed Democrats for the impasse and threatened to withhold crucial consumer price index (CPI) and jobs data, which are vital economic indicators for traders.
The odds of a Federal Reserve rate cut, which would typically boost digital asset markets by increasing liquidity, have decreased to 66.9% from 85% just last week. This shift reflects Fed Chairman Jerome Powell’s recent hawkish stance, despite jobs data, including a Goldman Sachs report showing a decline of 50,000 non-farm payrolls in October, pointing towards an economic slowdown.
Key Takeaways
Bitcoin’s repeated drops below $100,000 this month underscore a period of heightened volatility, driven by a confluence of factors including investor risk aversion, significant ETF outflows, and macroeconomic uncertainties. While some analysts remain optimistic about Bitcoin’s long-term potential, the immediate future is shaped by Federal Reserve policy, U.S. economic data, and broader market sentiment.
