Bitcoin crashes below $70,000 for first time since August, hits $68,297 as inflation fears trigger sell-off

Bitcoin plunged below $70,000 on Friday, November 13, for the first time since August, as stubborn US inflation, expectations of higher interest rates and institutional selling rattled cryptocurrency markets. Ethereum also slipped below $2,000, while major altcoins, including Solana, XRP and BNB, faced selling pressure.

The world's largest cryptocurrency declined as much as 4.4% to $68,297, its lowest level since August 19, according to Bloomberg. Bitcoin was trading near $68,500 at 1:05 pm Singapore time, as Asian equities surrendered earlier technology-led gains and bond markets weakened ahead of US producer-price inflation data.

Why is Bitcoin crashing?

The sell-off reflects mounting macroeconomic pressures, including elevated oil prices, persistent inflation and expectations of further Federal Reserve interest rate increases.

US core consumer prices rose 0.3% in October, exceeding estimates for the third consecutive month, while headline inflation climbed 0.4%. The figures strengthened expectations of another Fed rate hike in December.

Political developments have added uncertainty, with Democrats' expected control of both chambers of Congress raising concerns about tighter cryptocurrency regulations.

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Institutional investors retreat

US-listed spot Bitcoin ETFs recorded more than $2.5 billion in net outflows between October 30 and November 11, indicating weakening institutional demand.

Rich Rosenblum, co-founder of crypto market maker GSR, attributed the weakness to volatility in artificial intelligence stocks, dollar strength, persistent inflation and Nvidia's leadership changes.

According to CoinGlass, more than $1.2 billion in bullish cryptocurrency positions were liquidated over 24 hours.

“Once it broke below $70,000, over $1 billion of leveraged longs were forced out, which fed more selling,” said Sean McNulty, a derivatives trader at AQC Tech.

Prateek Gupta, Head of Business at Mudrex, highlighted a $14.2 billion contraction in stablecoin supply over 30 days, signalling tightening cryptocurrency liquidity.

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What levels should investors watch?

Riya Sehgal, Research Analyst at Delta Exchange, previously identified Bitcoin's support at $69,800-$70,000, followed by $68,000-$68,500. With Bitcoin breaching $70,000, the lower support zone is now in focus.

Ethereum's key support remains between $1,970 and $2,000.

Nischal Shetty, Founder of WazirX, said Bitcoin and Ethereum's relative strength index readings near 29 and 28 indicated oversold conditions.

What should investors do?

Vikram Subburaj, CEO of Giottus, advised investors against excessive leverage or aggressively buying short-term dips. Experts suggest staggered investments, with any sustained recovery dependent on improving institutional demand, liquidity conditions and greater clarity on Federal Reserve policy.

(With agency inputs)

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