Bitcoin's recent decline is being driven primarily by changing expectations for U.S. Federal Reserve monetary policy rather than the Binance hack, according to Coinbase Institutional's latest weekly market report. The analysis points to stronger-than-expected U.S. economic data, rising expectations for interest rate increases, substantial spot Bitcoin ETF outflows and a sharp contraction in stablecoin supply as key developments shaping market conditions.
The report comes as Bitcoin falls below the important $73,000 support level, raising concerns about further downside. Coinbase Institutional warned that a sustained move below this threshold would significantly increase the likelihood of a decline toward the $66,000–$68,000 support zone.
Federal Reserve Expectations Put Pressure on Bitcoin
Coinbase Institutional attributed much of Bitcoin's recent weakness to changing expectations surrounding the Federal Reserve's interest rate policy. According to Wu Blockchain the report, October nonfarm payrolls and Consumer Price Index (CPI) figures both exceeded market expectations, strengthening concerns about the outlook for monetary policy.
Following the economic data, markets fully priced in a 25-basis-point interest rate hike in December. Expectations also pointed to a cumulative 64 basis points of rate increases over the following 12 months.
These developments have become an important factor in the broader financial market environment. The shift in rate expectations coincided with Bitcoin's decline, which Coinbase Institutional said was more closely associated with monetary policy repricing than the Binance hack.
The distinction is significant because it places the focus on macroeconomic conditions rather than a single cryptocurrency industry incident when assessing the reasons behind Bitcoin's recent price weakness.
Bitcoin Breaks Below $73,000 as Stablecoin Supply Contracts
Bitcoin's move below $73,000 has placed a key technical support level under pressure. Coinbase Institutional identified this threshold as an important reference point for the markets, warning that a sustained break below it could increase the probability of further losses.
The research group highlighted the $66,000–$68,000 range as the next significant support zone if Bitcoin remains below $73,000. However, the report presented this level as a potential downside area rather than a confirmed price target.
Liquidity conditions have also weakened. Stablecoin supply contracted by a record $11.5 billion over the past 30 days, according to the figures cited in the report.
The contraction represents a notable reduction in the supply of stablecoins circulating in the cryptocurrency market. Stablecoins are commonly used as trading capital and settlement assets across digital asset platforms, making changes in their supply an important metric for monitoring market liquidity.
Bitcoin ETFs Record $1.44 Billion in Net Outflows
Institutional investment flows provided another indication of market pressure. U.S. spot Bitcoin exchange-traded funds recorded $1.44 billion in net outflows over the five trading days leading up to November 11.
The withdrawals coincided with a substantial deterioration in the aggregate unrealized position of ETF investors. According to Coinbase Institutional, holders of U.S. spot Bitcoin ETFs were sitting on approximately $12.7 billion in combined unrealized losses.
Unrealized losses represent declines in the value of holdings that have not necessarily been realized through asset sales. The reported figure therefore reflects the aggregate paper losses among ETF holders rather than confirmed realized losses.
$66,000–$68,000 Emerges as the Next Key Support Zone
Coinbase Institutional's assessment brings together several indicators of pressure on Bitcoin: stronger-than-expected October employment and inflation data, expectations for additional Federal Reserve rate increases, a record $11.5 billion contraction in stablecoin supply and $1.44 billion in spot Bitcoin ETF net outflows.
The report also emphasized the importance of the $73,000 threshold. If Bitcoin remains below that level, the likelihood of a move toward the $66,000–$68,000 support zone would increase significantly, according to Coinbase Institutional.
With ETF holders carrying approximately $12.7 billion in aggregate unrealized losses, the report identified the Federal Reserve outlook, market liquidity and the $73,000 support level as important factors in assessing Bitcoin's recent market decline.
Writer: Victoria Hale Technology & Blockchain Writer
Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.
She prioritises clarity and accuracy when explaining technical developments to a general audience.
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The articles on Hokanews are here to keep you updated on the latest buzz in crypto, tech, and beyond—but they’re not financial advice. We’re sharing info, trends, and insights, not telling you to buy, sell, or invest. Always do your own homework before making any money moves.
Hokanews isn’t responsible for any losses, gains, or chaos that might happen if you act on what you read here. Investment decisions should come from your own research—and, ideally, guidance from a qualified financial advisor. Remember: crypto and tech move fast, info changes in a blink, and while we aim for accuracy, we can’t promise it’s 100% complete or up-to-date.
