Bitcoin fell below $70,000 Friday for the first time since August as inflation concerns hurt crypto markets. The price dropped to $68,297, causing over $1 billion in leveraged bets to get wiped out. Sean McNulty said, “Once it broke below $70,000, over $1 billion of leveraged longs were forced out.”
Bitcoin fell below $70,000 Friday for the first time since August, as concerns about inflation and higher interest rates hurt cryptocurrencies.
The largest digital asset fell as much as 4.4% to $68,297, its lowest level since Aug. 19. It was trading around $68,500 at 1:05 p.m. in Singapore. Asian stocks erased an earlier tech-led advance while bonds slumped, with investors remaining cautious ahead of US producer-price data.
Bitcoin's weakness reflects a convergence of macro pressures on crypto in recent weeks. Elevated oil prices and high inflation have reinforced expectations for further Federal Reserve rate increases. Democrats retaking both chambers of the US Congress next year following the midterm elections has raised expectations of greater regulatory scrutiny on the industry.
Photo Credit: Bloomberg
This week, a key gauge of US consumer prices posted another firm advance in October, keeping the Fed on track to raise rates next month. The consumer price index, excluding food and energy, rose 0.3% from a month earlier, topping estimates for a third straight month. Overall prices jumped 0.4% as the cost of essentials climbed across the board.
Rich Rosenblum, co-founder of crypto market maker GSR, said volatility in the artificial intelligence trade and continued US dollar strength have washed out some long Bitcoin positions, while the hot inflation data and changes in Nvidia's leadership are also weighing on risk assets.
More than $1.2 billion in bullish bets on cryptocurrencies were unwound over a 24-hour period, according to CoinGlass data.
“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 market maker AQC Tech.
Institutional buyers have also been on the retreat for the past two weeks. From Oct. 30 to Nov. 11, US-listed spot Bitcoin exchange-traded funds saw more than $2.5 billion in net outflows.