6 min read - BTC has fallen to $67.5K, a three-month low, amid multiple headwinds
- Hawkish Fed rate hike expectations
- Strategy is set to leave the MSCI benchmark indices
- A Democratic Congress could stall pro-crypto regulation
- BTC ETF outflows point to weak institutional demand
- BTC technical analysis: testing the 200-week moving average
Bitcoin has tanked to a three-month low on Friday, falling below $70,000 amid growing fears of further interest rate hikes, concerns over Strategy’s removal from the MSCI indices and an ongoing sell-off in tech stocks.
The largest cryptocurrency has fallen 6% over the past 24 hours, dropping below $70,000 for the first time since mid-August to a low of $67,500. Bitcoin is on track to lose 9% this week, marking its sixth straight week of losses.
Fed rate hike expectations rise
Multiple headwinds are weighing on Bitcoin, chief of which is the prospect of further interest rate hikes by the Federal Reserve. Hotter-than-expected CPI data and hawkish Fed commentary this week have lifted rate hike expectations and Treasury yields.
The market has cemented expectations for a rate hike in December and is even pricing in an 11% probability of a 50 basis point hike.
The 10-year Treasury yield has moved back above 5.1%, and the U.S. dollar is rising to a 19-month high. Expectations of higher rates tend to hurt demand for riskier assets such as crypto, as reduced market liquidity and higher yields on government debt can draw capital away from the sector.
BTC may need to see the Federal Reserve adopt a less hawkish stance to stage a meaningful recovery. This could come if oil prices continue to fall or economic growth slows.
Strategy to leave MSCI benchmark indices
Strategy has also become a headwind for Bitcoin this week after MSCI said the world’s largest Bitcoin treasury firm will be excluded from its benchmark indices at the end of this month.
This development in itself does not pose a direct selling risk for Bitcoin. However, it does limit Strategy’s ability to raise new capital, and the company has been a major source of demand owing to its regular, large-scale Bitcoin purchases.
Democratic Congress could limit pro-crypto regulation
These headwinds come as the Democrats won control of both the House and the Senate in the midterm elections at the start of the month. Concerns are growing that progress on crypto regulation could stall.
The Digital Market Clarity Act, which was set to define how U.S. regulators oversee crypto, is now in question. If it stalls until the end of the year, a Democratic-controlled Congress is unlikely to help push it through.
Any signs of pro-crypto regulation progressing in the coming months, before the Democrats take control in January, could be supportive.
BTC ETFs see sustained outflows
BTC ETFs have recorded a fifth consecutive day of net outflows, with outflows in eight of the past nine sessions. Monthly net outflows for November stand at $1.8 billion, following $515 million of outflows in October.
ETFs are considered one of the clearest gauges of institutional appetite, and persistent selling does little to improve the outlook for BTC. BTC may need to see institutional demand pick up substantially to stage a recovery.
Tech stock sell-off
Tech stocks have seen high volatility in recent weeks amid concerns over the AI trade and the Democratic Congress, and Nvidia has tanked 10% this week after CEO Jensen Huang stepped down. BTC’s correlation with the tech-heavy Nasdaq is high, pointing to a strong positive relationship. Nvidia’s earnings are due next week, together with Anthropic’s IPO, which could help revive enthusiasm for BTC.
A recovery in tech stocks could help support BTC. However, ongoing weakness could keep pressure on crypto.
Technical picture: will support hold?
On the weekly chart, the price is testing support at the 200-week simple moving average, having not yet fallen aggressively below the 50-week moving average, a level often considered the dividing line between a bull and bear market.
A break below the 200-week moving average could see the price fall towards $57.7K, the 2026 low.
Should the 200-week moving average hold, buyers could look towards $75K, the 50-week moving average, and the key level that separates a bull market from a bear market.
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