The Crypto Desk desk. Editor: Sam Daodu.
Bitcoin (CRYPTO: BTC) has lost 13% in seven days and trades at $65,906, below every daily close since August 19. It’s down 4.3% in 24 hours and 48% below its all-time high of $126,080. So why is Bitcoin crashing this week?
Bespoke Investment Group says Bitcoin peaked on September 21 and now trades more than 20% below that high. On X, the firm called Bitcoin “deep into oversold territory,” meaning the price fell so far, so fast, that trend indicators flag the selling as stretched. Six forces explain the drop, and three of them carry most of the weight.
Rate Hike Fears and ETF Outflows Are Driving the Bitcoin Crash
Rates rank first. The Fed raised the top of its target range to 4% from 3.75% on September 16, its first hike since 2023. Fed funds futures, contracts that track where traders expect the Fed’s rate to go, now price an 89% probability of another quarter-point hike at the December 9 decision.
Bond yields have climbed with those expectations, and the 10-year Treasury yield closed at 5.15% on November 13. When a government bond pays that much with almost no risk, a coin that pays no interest has to fight harder for every dollar, and borrowing to buy it costs more.
Fund outflows rank second. U.S. spot Bitcoin ETFs, which own the coin directly and sell some of it when investors redeem shares, recorded $185 million in outflows on November 13, their seventh straight day of withdrawals. The week’s outflows come to about $1.07 billion, and a Bitcoin price prediction for November looks at where the month could end.
Forced Selling, Strategy’s Index Exit and Miners Add More Pressure
Forced selling ranks third. Exchanges liquidated $637 million in leveraged Bitcoin positions over 24 hours, and 91% of them were longs, positions that profit when the price rises. A liquidation happens when an exchange closes a borrowed-money position because losses have eaten the trader’s deposit, and each forced sale pushes the price lower and can trigger the next one, a chain reaction called a liquidation cascade.
Strategy Inc. (NASDAQ: MSTR | MSTR Price Prediction) ranks fourth. MSCI plans to drop Strategy from its global indexes on November 30, which could force index funds to sell the stock and make it harder for the company to raise cash for more Bitcoin. Strategy holds 850,364 Bitcoin, worth about $56 billion, after adding 1,036 in its November 9 filing, and its shares closed at about $112 on November 13, down 13.4% for the week.
Miners rank fifth. Mining difficulty, a setting the network adjusts so new blocks keep arriving on schedule, has fallen 9.1% to about 134.8 trillion, its largest cut since June, which means miners have switched machines off. Miners under pressure tend to sell coins to cover power bills.
Tech stocks rank last, because the evidence is thin. The VIX, Wall Street’s fear gauge built from S&P 500 options, read 18.7 on November 12, down from 28.2 on November 5, a level that points to nervous stock investors rather than panic.
Bitcoin Lost Its 200-Day Average but Fell Less Than Ethereum and Solana
Bitcoin now trades below all three of its widely watched moving averages, which smooth out daily prices to show the trend. The 20-day average is $76,624, 16% above its price, the 50-day is $80,558, 22% above, and the 200-day is $73,043, 11% above. The break below the 200-day line, a common gauge of long-term momentum, signals that much of the late-summer rally has reversed.
The smaller majors did worse. Over the same 24 hours, Ethereum (CRYPTO: ETH) fell 5.1%, and Solana (CRYPTO: SOL) dropped 9.1%, and both also trail Bitcoin over one month, year to date, and one year.
Bitcoin absorbs selling better because it has the deepest pool of buyers, including spot ETFs and corporate treasuries such as Strategy. Those buyers are under strain too, since Bitcoin’s slide has left Michael Saylor’s entire Bitcoin pile underwater, two weeks after the executive chairman said Bitcoin was “at the beginning of its next bull market.”
Smaller coins have thinner order books and more borrowed money behind their trades, so they swing harder in both directions, which also explains why altcoins tend to follow Bitcoin on the way down.
Why Is Bitcoin Crashing, and Could the Selling Ease Soon?
Bitcoin is crashing because rate hike fears and a 5.15% Treasury yield are pulling money toward safe income, ETF holders are selling, and leveraged longs have been forced out. Liquidations look like the first pressure to fade, since forced selling stops once those positions close, and ETF flows could turn next, because one net inflow day would end the seven-day run. Rates and Strategy’s index exit look further out, as neither has happened yet.
The clearest test is the 200-day average. A close back above $73,043, 11% above Bitcoin’s price, plus a net inflow day for the spot ETFs before December 9 could suggest the crash ran on forced selling now spent, though that alone doesn’t bring in fresh buyers. If outflows continue and the Fed hikes, the selling could run further, a risk for anyone weighing what $1,000 in Bitcoin could be worth in five years.
Contact [email protected] for any questions or corrections.
Sam Daodu is a crypto analyst and the editor of 24/7 Wall St.'s Crypto Desk, where he covers Bitcoin, XRP, Ethereum, Solana and the altcoins investors search for most. His work focuses on price levels, spot ETF flows, on-chain data and the regulatory decisions that move crypto markets, written so a first-time buyer and a seasoned trader can both use it.
Sam has written about crypto professionally since 2019 and has published more than 2,000 articles. Before joining 24/7 Wall St., he wrote for crypto media outlets and Web3 companies and ghostwrote for crypto founders and token launches. His analysis is syndicated on Yahoo Finance, MSN and AOL and has been cited by other crypto news sites. He also founded MacLabs Marketing, a content and personal branding agency for crypto founders and executives.
When he isn't reading charts, Sam is usually at the gym or watching One Piece, a series he maintains has better tokenomics than most altcoins.
