Bitcoin faced renewed selling pressure following the release of October Consumer Price Index data that exceeded forecasts, reigniting concerns that the Federal Reserve may resume rate hikes at its December meeting. According to CryptoSlate, the probability of a 50-basis-point rate increase in December surged from 0% to 13.6% on November 10 following the inflation print, while the likelihood of a 25-basis-point hike climbed from 84% to 86.4% based on CME FedWatch data. Decrypt reported that Bitcoin subsequently fell below $74,000 as the hotter-than-expected inflation data increased pressure on the central bank to maintain restrictive monetary policy.
Compounding these macroeconomic anxieties, the cryptocurrency market faces a significant liquidity drain as stablecoin supplies contract at their fastest pace since the previous bear market. The Block noted that aggregate stablecoin supply dropped $14.2 billion over the past month, representing the largest contraction since June 2022, with USDT and USDC supplies falling nearly $11 billion during the same period. Notably, gold-backed stablecoins held steady while fiat-pegged tokens retreated. Decrypt characterized the current environment as Bitcoin "running on empty" amid this unprecedented stablecoin drain and persistent ETF outflows that have weakened demand structures.
The confluence of tightening monetary policy expectations and shrinking on-chain liquidity has precipitated notable capitulation among recent Bitcoin buyers. Data from CryptoQuant cited by Cointelegraph indicated that Bitcoin declined to an 11-week low of $72,670, slipping decisively below the short-term holder average cost basis of approximately $75,700. This technical breakdown prompted significant realized losses, as short-term holders transferred roughly 47,000 BTC—valued at approximately $3.6 billion—to exchanges at prices below their entry points, according to Decrypt. The publication also noted that Binance observed sharp inflows specifically from these recently moved coins, suggesting immediate distribution rather than custody transfers.
Market sentiment has deteriorated alongside these technical and fundamental pressures. After suffering five consecutive weeks of losses, Bitcoin traded below $74,000 as of Wednesday, with derivatives markets pricing in elevated downside risk. The Block reported that Derive currently indicates a 31% probability of Bitcoin trading below $70,000 by Christmas, while CryptoSlate documented the asset defending the $73,000 level despite the dramatic shift in rate-hike probabilities over the preceding 24-hour period.