Bitcoin crashed through $68,000 as $1.5bn of leveraged trades blew up. The Fed is not coming to the rescue
Future Times4 min read
In 30 seconds
Two days after hot inflation knocked it to a three-month low, bitcoin has shed another $5,000 and lost its long-term trend line. With a December rate rise all but settled, traders now see a fall to $65,000 this month as a coin flip.
- The selling is coming from fund holders, not only traders: over $1.4bn left US spot bitcoin ETFs in the five sessions to 11 November
- Traders now lean towards back-to-back Fed hikes, putting a January rise at 62% on top of December's
- Strategy leaves MSCI's US, World and ACWI indices at the close on 30 November, so index funds must sell its shares
What it means
- MarketsBitcoin is trading as a leveraged rate asset: every upward shift in Fed expectations now feeds straight into lower…
- Stocks and sectorsStrategy faces both a weaker bitcoin and index-fund selling into 30 November.
- BusinessETF outflows have turned 2026 negative for the funds that brought institutional money into bitcoin, leaving asset…
- PolicyThe Fed's December decision is now a crypto event.
What to watch
- 17 NovCome Nvidia's results on 17 November, the PCE inflation report due late in the month, MSCI's index…
- 30 NovCome Nvidia's results on 17 November, the PCE inflation report due late in the month, MSCI's index…
- 9 DecCome Nvidia's results on 17 November, the PCE inflation report due late in the month, MSCI's index…
The odds
Polymarket · finalBitcoin dips to $65,000 in November
Resolved yes51% when this was published
What would move these odds
- A soft producer-price report on 13 November would ease rate fears and lower the odds
- A break of support around $68,500-69,000 would bring $65,000 into range quickly
- A recovery above the 200-day average near $73,100 would cut the odds sharply
- What price will Bitcoin hit in November: ↓ 62,500100%Resolved yes
- What price will Bitcoin hit in November: ↓ 60,00047%up 39 points
- What price will Bitcoin hit in 2026: ↓ 65,000100%Resolved yes
On Wednesday bitcoin was trading below $74,000, already at a three-month low after a hot inflation report. By the early hours of Friday it had slipped below $68,000. In the 24 hours to midnight in New York, about $1.5bn of leveraged crypto positions were forcibly closed, according to CoinGlass data, and nine in every ten of them were wagers on higher prices.
The slide has taken bitcoin to its lowest level since 20 August and pushed it decisively below its 200-day moving average, near $73,100. It is down more than 13% this month and roughly 45% below its October 2025 record.
The question is how far the break runs. Traders put the chance of bitcoin touching $65,000 before the end of November at about 50%, as of 13 November, up from 21% a week ago. They also see a December rate rise by the Federal Reserve as close to certain. The two numbers are linked.
A rate trade that keeps getting worse
The trigger was Tuesday's consumer price report. The Bureau of Labor Statistics said prices rose 0.4% in October, with core prices up 0.3%, both a tenth of a point above economists' forecasts. That sealed the case for the Fed to raise rates again on 9 December, and put a follow-up rise in January firmly on the table.
Traders now put the chance of a quarter-point December rise at 89%, up 22 points in a week, with a further 9% on a half-point move. More striking is January: the chance of another quarter-point rise there has jumped from 18% to 62% in seven days.
For an asset with no yield, that is the worst kind of news: higher rates raise the return on cash and squeeze the borrowed money behind crypto's leveraged trading. Jeff Mei, chief operating officer of the exchange BTSE, warned that if the Fed raises by half a point rather than the expected quarter, bitcoin and other cryptocurrencies could have more room to fall.
Nvidia lit the fuse, leverage did the rest
The second blow came from Wall Street. Jensen Huang's abrupt resignation as Nvidia's chief executive on Thursday sent its shares down nearly 13% at the open and hit the technology trade bitcoin moves with. Bitcoin lost $72,000 during the US session, said Rick Maeda, head of markets at the derivatives analytics firm Laevitas. Once it broke $70,000 in Asian trading, the leveraged long positions stacked beneath it were forced out. Each forced sale pushed the price towards the next.
US spot bitcoin exchange-traded funds lost $1.28bn in the week to 6 November, their worst week since late June, which flipped them to net outflows for 2026. The selling has continued: about $1.44bn left in the five sessions to 11 November, including $299.8mn on Wednesday alone, $269.7mn of it from BlackRock's iShares Bitcoin Trust.
A second source of forced selling is now on the calendar. MSCI confirmed on 11 November that Strategy, the largest corporate holder of bitcoin, will be removed from its US index at the close of trading on 30 November, taking it out of the World and ACWI indices too. Index funds must sell the company's shares, not its bitcoin, but the stock trades as a proxy for the coin and fell about 7% at Thursday's open.
How far the market thinks this runs
Traders see the next leg as likely but limited. Beyond the even chance of $65,000 this month, they give 30% to $62,500 and 17% to $60,000. Over the rest of the year, the picture is starker: a 70% chance of $65,000 before 31 December, up from 33% a week ago, and 38% for $60,000. A collapse to $55,000 is priced at 18%.
Those numbers describe grinding losses rather than a crash, with the Fed's 9 December decision falling inside the longer window. Traders are also not pricing a disorderly unwind at Strategy: the chance that the company faces a margin call this year is under 2%.
Why the bears could be wrong
The case for a rebound rests on the same driver as the sell-off. Keith Alan of Material Indicators said a cool producer price report, due on Friday, "could easily flip this script bullish". Liquidations of this size also clear out leverage, removing forced sellers. And Jeff Ko, chief analyst at ViaBTC, argued that a de-escalation in Iran, by easing oil prices, could be one of the quickest ways to cool inflation.
The August low of about $62,800 also sits well below where bitcoin trades now. For the market to be wrong, ETF outflows would need to stop and the Fed would need to signal that December is one rise rather than the start of a run. January's pricing says traders doubt the second.
What it means for markets and business
Markets Bitcoin is trading as a leveraged rate asset: every upward shift in Fed expectations now feeds straight into lower crypto prices and more forced selling.
Stocks and sectors Strategy faces both a weaker bitcoin and index-fund selling into 30 November. Crypto exchanges, miners and listed bitcoin treasury companies are exposed to the same squeeze in trading activity and collateral values.
MSTRIBITBusiness ETF outflows have turned 2026 negative for the funds that brought institutional money into bitcoin, leaving asset managers' crypto product lines with a harder sell into year end.
Policy The Fed's December decision is now a crypto event. A half-point move, which traders still see as a one-in-ten chance, would hit the most leveraged corners of the market hardest.
What to watch
Friday's producer price report is the first test. Then come Nvidia's results on 17 November, the PCE inflation report due late in the month, MSCI's index changes at the close on 30 November and the Fed's decision and projections on 9 December. Analysts point to support at $68,500-69,000; below it, $65,000 is the next marker. A recovery above $73,100 would mean the break was a false alarm.
Until then, bitcoin's price is being set in Washington, and the Fed's next move is up.