Why Bitcoin Is Falling Today
Bitcoin dropped below $70,000 overnight, to its lowest level since August, after a hotter-than-expected inflation report pushed up rate hike expectations and a wave of leveraged positions was liquidated.
Bitcoin (BTC -4.23%) has been experiencing a decline today, with its value dropping approximately 4.7% over the past 24 hours, as of 1:11 p.m. ET on Friday, Nov. 13. This decrease pushed the cryptocurrency below the $70,000 mark overnight. The S&P 500 (^GSPC -0.63%) and the Nasdaq Composite (^IXIC -1.25%) have also seen declines, with the former down 0.8% and the latter 1.2%, respectively.
Overnight, Bitcoin's value dropped to around $68,000, its lowest level since August of this year. The primary reason for this fall was the unexpectedly higher-than-anticipated inflation data released on Tuesday, which increased the likelihood of a Federal Reserve rate hike. Simultaneously, long-term U.S. Treasury rates have been increasing, with the yield on the 10-year reaching 5.13%.
When yields on longer-term Treasuries rise, investors often shift away from riskier assets such as cryptocurrencies, favoring the relative safety of bonds. Furthermore, a significant number of leveraged crypto positions were closed within a single day, exacerbating the losses. If the Federal Reserve proceeds with its anticipated December rate hike, as currently expected, the downward pressure on Bitcoin is expected to persist.
Analysts predict that Bitcoin and the broader crypto market will continue to face challenges for an extended period.
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- Why Bitcoin Is Falling Today nasdaq.com
