Bitcoin recovered part of its overnight losses on Friday after briefly falling to about $67,555, its lowest level since mid-August. The cryptocurrency later traded near $69,800, but remained under pressure from a stronger U.S. dollar, elevated Treasury yields, leveraged liquidations and continued withdrawals from U.S. spot Bitcoin exchange-traded funds.
Bitcoin had been trading near $72,800 on Thursday before slipping toward $71,000 and then breaking below $70,000 overnight in U.S. trading. The decline also pushed the asset below its 200-week moving average, located near $68,000, although buyers later lifted the price back above that level.
Dollar strength keeps pressure on risk assets
The U.S. Dollar Index held above 103 on Friday after a three-day advance carried it to its highest level since April 2025. The 10-year Treasury yield was near 5.15% before the latest economic data, while two-year yields were on track for their worst weekly performance since 2024 as traders assessed the Federal Reserve’s interest-rate outlook.
Markets continued to price an 88% probability of a quarter-point rate increase at the Fed’s December 8-9 meeting, alongside a 12% chance of a half-point move, according to CME FedWatch data. Federal Reserve Governor Christopher Waller has raised the possibility of a 50-basis-point increase, while New York Fed President John Williams said Thursday that inflation remained high and policymakers needed to take further action.
Higher interest rates can reduce demand for non-yielding assets such as Bitcoin, while a stronger dollar often weighs on risk-sensitive markets. Bitcoin has also diverged from technology stocks: it fell 5.9% between November 5 and November 12, while the Nasdaq 100 gained 6.4%.
Cooler producer inflation offers limited relief
The Labor Department reported that the Producer Price Index for final demand increased 0.3% in October, below the 0.4% monthly gain economists had expected. September’s increase was revised to 1.4%. Core producer prices, which exclude food and energy, also rose 0.3%, matching forecasts.
On an unadjusted annual basis, the headline index was 6.5% higher than a year earlier, marking its largest 12-month increase since November 2022. The slightly softer monthly reading briefly eased pressure on the dollar, but it did little to alter expectations for a December rate increase.
Liquidations and ETF outflows add to the decline
The break below $70,000 triggered a wave of forced selling across crypto markets. Approximately $1.64 billion in positions were liquidated over 24 hours, with long positions accounting for nearly 89% of the total. Bitcoin-related liquidations represented about $916 million.
U.S. spot Bitcoin ETFs recorded roughly $47.7 million in net outflows on Thursday, extending their withdrawal streak to six consecutive sessions and bringing cumulative outflows to approximately $1.49 billion. BlackRock’s iShares Bitcoin Trust (IBIT) alone experienced about $2 billion in outflows over the nine sessions through Wednesday, while total net outflows for the funds in 2026 reached approximately $1.56 billion.
Market sentiment weakened further, with a widely followed crypto fear and greed gauge falling to 20, its lowest reading since July 8. Bitcoin was also on course for a second consecutive annual decline.
Thin liquidity leaves Bitcoin vulnerable
Positioning in derivatives markets has become more defensive. Average perpetual-futures funding rates turned negative for the first time in a month as Bitcoin approached $68,500, indicating that short sellers were paying to maintain their positions.
Order-book liquidity has also deteriorated. Bitcoin market depth across major exchanges fell to about $72 million on November 9, roughly 33% below typical levels. “Liquidity stays thin while leverage stays elevated, leaving the market vulnerable to sharp moves in either direction,” Tanay Ved, a senior research associate at Talos, said.
