Bitcoin Hits 12-Week Low Amid Fed Rate Fears

The cryptocurrency market experienced a broad sell-off as Bitcoin hits a 12-week low, sliding to approximately $68,500 on Friday amid renewed U.S. inflation concerns and continuous investor withdrawals. Major cryptocurrencies followed the downward trend, with Ethereum trading near $1,925 and Solana dropping below $80. Market data showed Bitcoin down about 4.5% over a 24-hour period and 9.5% for the week, wiping out the majority of its late-summer recovery.

Despite the recent pullback, Bitcoin remains roughly 16% above its late-June low near $59,000, though it has retreated about 21% from its autumn peak near $86,000. The downward momentum has been heavily influenced by macroeconomic factors and shifting expectations regarding United States monetary policy. Chicago Federal Reserve President Austan Goolsbee noted that inflation pressures remain persistent across services, medical costs, and energy sectors, casting doubt on a swift return to the central bank's two percent target.

Additional pressure came from Federal Reserve officials signaling a potential shift in policy. Fed Governor Christopher Waller stated he would support a quarter-point rate increase at the upcoming December meeting, while noting that higher-than-expected inflation data could warrant an even larger move. Following a core consumer price index report showing a 0.3% increase, market futures reflected heightened expectations for a tightening policy stance. Meanwhile, wholesale prices rose 6.5% year over year, marking the largest annual jump since 2022.

Rising interest rates and persistent inflation concerns have pushed Bitcoin to a twelve-week low.

Institutional demand has also cooled significantly. U.S. spot Bitcoin ETFs recorded six consecutive sessions of net outflows, totaling about $1.49 billion between November 5 and November 12. Despite these withdrawals, cumulative net inflows remain around $55.5 billion. Technical indicators reveal a bearish short-term trajectory, with Bitcoin's relative strength index dropping to 25.4, pointing to oversold conditions that could signal either stretched selling or continued downward momentum.

Why it matters

Macroordinary shifts in interest rates directly affect speculative assets like cryptocurrencies by making traditional interest-bearing investments more appealing to investors. As central banks evaluate inflation data ahead of upcoming policy decisions, broader financial markets face heightened volatility and changing capital flows.

Upcoming macroeconomic updates, including the Federal Reserve meeting minutes and the PCE inflation report, will serve as crucial checkpoints for market participants navigating the current monetary landscape.