Key Points
A hotter-than-expected inflation report on Tuesday raised expectations for a Fed rate hike, and that, along with a stronger dollar, pushed Bitcoin below $70,000 overnight.
Long-term Treasury yields are climbing, which tends to pull investors out of riskier assets like crypto, and the liquidation of leveraged positions in under 24 hours sped up the losses.
If the Fed hikes in December as expected, I think Bitcoin and crypto at large will keep seeing pressure for some time.
Bitcoin (CRYPTO:BTC) is falling today, down about 4.7% in the last 24 hours as of 1:11 p.m. ET on Friday, Nov. 13, after a stronger dollar and rising expectations of a Fed rate hike pushed it below $70,000 overnight.
The S&P 500 (SNPINDEX:^GSPC) and the Nasdaq Composite (NASDAQINDEX:^IXIC) are down 0.8% and 1.2%, respectively.
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Bitcoin price drop: inflation, Treasury yields, and liquidations
Overnight, Bitcoin fell to around $68,000, its lowest since August of this year. The main driver was Tuesday's hotter-than-expected inflation data, which raised expectations of a rate hike. At the same time, long-dated U.S. Treasury rates are on the rise, with the yield on the 10-year reaching 5.13%.
When long-term Treasuries pay more, investors tend to move away from riskier assets like crypto, preferring the security of bonds.
At the same time, more thion of leveraged crypto positions were liquidated in under 24 hours, accelerating losses.
Bitcoin outlook: sixth weekly decline and a December Fed hike
If the Fed hikes in December as expected -- a quarter point is all but assured at this point -- that pressure doesn't go away. I think Bitcoin and crypto at large will continue to see pressure for some time.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.