Bitcoin fell below $67,000, and traders increased their bets on further interest rate hikes by the Federal Reserve.
October inflation data reinforced market expectations for another interest rate hike in December.
Coinbase Institutional reports that the supply of stablecoins has decreased by $11.5 billion, marking the largest decline yet.
Today, after falling below $75,500, the price of Bitcoin continued to decline, reaching a low of $66,456 and breaking through the $67,000 mark. So far this week, Bitcoin has lost nearly 12% in value. This drop triggered liquidations amounting to $663.83 million, of which $533.56 million came from long-position traders.
However, Coinbase Institutional has revealed the real reason for the continuous decline of Bitcoin.
The following is what he said.
Concerns about the Federal Reserve's interest rate hikes are putting pressure on Bitcoin
Coinbase Institutional stated in its weekly report that the recent decline in Bitcoin is more related to changes in the Federal Reserve's interest rate expectations, rather than the Binance hack incident. For Bitcoin, a greater problem comes from the macroeconomic level.
In October, CPI rose by 0.4% month-on-month, and the core CPI increased by 0.3%. Both figures were 0.1 percentage points higher than expected, leading traders to anticipate that the Federal Reserve will raise interest rates by 25 basis points in December.
Coinpedia News reports that Federal Reserve governor Christopher Waller also stated that he supports a 25-basis-point interest rate hike, raising rates to 4% to 4.25%. He warned that if core inflation rises above 0.3%, the Federal Reserve may consider a more substantial 50-basis-point increase.
Therefore, the market currently expects the Federal Reserve to raise interest rates by approximately 64 basis points over the next 12 months, which is higher than the 37 basis points expected at the beginning of November.
For Bitcoin, higher interest rates would reduce the attractiveness of this non-interest-bearing asset, and a stronger dollar would also bring additional pressure. The US Dollar Index has risen to 103.4, reaching its highest level since April 2025.
Bitcoin faces more selling pressure
Pressure doesn't come solely from interest rates. In the past 30 days, the supply of stablecoins has decreased by $11.5 billion, marking the largest decline in the Coinbase Institutional record.
There has also been a large-scale outflow of funds from Bitcoin spot trading ETF. Since October 30th, the outflow of funds has reached a record $3 billion, and during this period, there was only a net inflow of $74.6 million on November 4th.
In addition, MSCI confirms that Strategy will be removed from its global indices after November 30th. This may force funds that track these indices to sell approximately $2.8 billion worth of Strategy shares.
Bitcoin Plunge Warning: Will We See $16,000?
With the current trading price of Bitcoin below $67,000, Coinbase Institutional believes that if the range between $66,000 and $68,000 is lost, the next key level will be $62,000. On the upside, if the price returns above $73,000, the possibility of Bitcoin reaching $80,000 again will increase.
Bitcoin critics Peter Schiff also warn that the decline could further intensify. He stated that if Bitcoin falls below $50,000, selling pressure may accelerate, and the price could drop to $16,500, which is below the low of 2022.
He added, "I wouldn't be surprised if that level is retested before the end of the year."
