Cryptocurrency prices fell on Monday, with Bitcoin slipping below the key $75,000 support level and most major altcoins trading in the red. The move was driven by a combination of faster outflows from spot crypto exchange-traded funds, a sharp rise in leveraged liquidations, and growing expectations that the Federal Reserve may tighten policy further.
Key takeaways
- Price move: Bitcoin dropped below the $75,000 support level, while most altcoins posted losses.
- Catalyst: Spot Bitcoin ETF outflows accelerated, leveraged liquidations surged, and rate-hike odds increased after strong U.S. jobs data.
- Market implication: Risk appetite appears to be weakening as macro headwinds and forced selling reinforce downside pressure.
- Broader read-through: A lower “Fear and Greed” reading suggests traders are responding more cautiously to risk.
ETF outflows and shifting political expectations
Spot Bitcoin ETFs recorded $411 million in outflows on Friday, following $430 million in the prior session, according to data referenced in the report. Total outflows this month reached $1.28 billion, more than double the $515 million recorded in October.
The pressure was not limited to Bitcoin. Spot Ethereum ETFs have shed more than $365 million in assets this month, after losing $1.6 billion last month, the report said. Solana funds have lost over $26 million in November after losing $143 million in October.
The report linked the broader selloff to political expectations after the U.S. midterm elections. It said Democrats are on track to win 56 Senate seats and more than 250 House seats, which could increase scrutiny of the crypto sector. The report also pointed to a possible challenge to the CLARITY Act, intended to shift much of crypto-related regulatory work from the Securities and Exchange Commission to the Commodity Futures Trading Commission.
Leveraged liquidations intensify selling pressure
Crypto losses were amplified by liquidations. CoinGlass data cited in the report showed total liquidations rising by 1,947% over the prior 24 hours to more than $1.14 billion. Bitcoin positions worth $305 million were liquidated, alongside more than $497 million in Ethereum liquidations and $41 million in Solana liquidations.
Such liquidations typically convert margin stress into market sell orders, worsening downside momentum. The report also noted that the surge in liquidations coincided with a decline in futures positioning: open interest fell by 2.75% over 24 hours to $127.8 billion.
Crypto sentiment shifts further toward fear
Weak price action aligned with a deterioration in sentiment indicators. The report said the Crypto Fear and Greed Index moved from the “greed” zone of 81 in September to the “fear” zone of 27. It added that cryptocurrencies commonly decline when the index is in the fear zone.
Rate-hike odds rise after U.S. jobs strength
Macro expectations also contributed to the selloff. The report said markets increasingly price a potential Federal Reserve interest-rate hike, with the CME Fed Futures tool placing the odds of a hike at nearly 80%, as reflected by Polymarket and other prediction platforms.
According to the report, the shift came after strong U.S. jobs data released on Friday. It said the economy created 165,000 jobs and the unemployment rate fell to 4.1% last month. With inflation still above the Fed’s 2% target, the report argued the central bank has incentives to maintain restrictive policy, a development that tends to weigh on higher-risk assets such as crypto.
What to watch next
Investors are likely to focus on whether ETF outflows continue and whether liquidation pressure eases as futures open interest stabilizes. With rate-hike expectations already elevated following the jobs data, attention will also turn to upcoming U.S. inflation and labor-market releases, alongside any Fed communications that could further influence liquidity conditions for risk assets.
