Bitcoin Drops to $69K On 'Concentrated Liquidation' and 'Weakening' Demand

Leading cryptocurrency Bitcoin has dropped 5.6% on the day, and is currently trading at just over $69,300, per Decrypt data. It comes after the latest consumer price index, or CPI, results came in "hotter than expected," experts said, with the drop was triggered by a "concentrated liquidation."

Bitcoin's plunge took it to a 24-hour low of $67,922, its lowest level since mid-August, when it boosted from $63,000.

"Bitcoin’s drop below $69,000 was directly triggered by a concentrated liquidation of leveraged long positions," Tim Sun, senior analyst at Hashkey, told Decrypt. "Though the deeper issue lies in steadily weakening market demand."

Sun highlighted U.S. Bitcoin spot ETFs recording six consecutive days of net outflows, according to CoinGlass. He also pointed to stablecoin supply shrinking and MSCI removing digital asset treasury firm Strategy from its funds.

"ETFs, stablecoin liquidity, and corporate treasuries have served as the primary capital pillars supporting this Bitcoin rally," Sun said. "With all three coming under simultaneous pressure, the market is losing the marginal buying power that previously propelled prices higher."

Meanwhile, other major cryptocurrencies have also taken a hit. Ethereum has dropped 4.6% on the day to $1,953, BNB has slipped 4.7% to $639.46, and Solana is down 3.1% to $80.47, according to Decrypt data. The global crypto market cap has dropped 4.6% over the past 24 hours to $2.39 trillion.

It follows U.S. CPI rising 0.4% in October, which is "hotter than expected, even if the headline monthly rate eased to 0.4% from September’s 0.6%," according to CoinShares head of research James Butterfill. "More troubling was the composition," he added. "Food rose 0.5%, services remained firm, and core CPI increased 0.3%, with services excluding rent, a gauge of domestic price pressure the Fed watches closely, rising 0.5%. The inflation problem is therefore no longer easily dismissed as an oil story."

The consumer price index, or CPI, is a way of measuring inflation that tracks the average price changes of everyday goods and services over time. Central banks tend to use CPI to inform whether they'll cut or hike interest rates, meaning higher-than-expected CPI signals a potential Federal Reserve hike.

Polymarket predictors put a 97% chance on the Fed raising interest rates this year, up from 75% at the start of the week. The CME FedWatch tool, meanwhile, sees an 88% chance of a 25 basis point hike, with 12% anticipating a 50 basis point rise.

On top of the CPI, Bitcoin's downward move comes following Nvidia CEO Jensen Huang resigned from the company, after reports of multiple affairs including with a suspected Chinese spy and a senior company executive spread.

Huang's departure has sparked "severe volatility across tech stocks, further dampening market risk appetite," Sun told Decrypt. "This has prompted broader portfolio de-risking, amplifying the downward pressure on Bitcoin," he added.

For a crypto rebound to happen, Sun said that Bitcoin needs "long-term allocation capital" to flow back into crypto after ETFs, stablecoins, and digital asset treasury companies have taken a hit in recent weeks.