Bitcoin Falls Below $74K as 89% Fed Hike Bets Pressure Crypto Markets

Bitcoin dropped below $74,000 on Wednesday as stronger-than-expected US inflation data increased expectations of another Federal Reserve interest-rate increase. A stronger US Dollar, rising Treasury yields and continued withdrawals from spot Bitcoin exchange-traded funds added to selling pressure. The wider cryptocurrency market also declined as investors assessed the implications of the Democrats’ victories in both chambers of Congress for future US digital-asset regulation.

Hot US CPI Revives Fed Hike Expectations

Bitcoin fell 1.1% to $73,698 by 04:52 ET (09:52 GMT), after touching its lowest level in three months during overnight trading. The decline followed October inflation figures that exceeded economists’ forecasts and strengthened the case for further monetary tightening.

The US Consumer Price Index increased 0.4% month over month in October, while core inflation, which excludes food and energy, rose 0.3%. Both readings were above expectations, reinforcing concerns that inflation remains difficult to bring under control.

Federal Reserve officials also adopted a more hawkish tone. Governor Christopher Waller indicated that the latest core inflation reading could justify considering a larger rate increase, while other policymakers signalled that borrowing costs may need to rise further.

According to the CME FedWatch tool, traders were assigning approximately 89% odds to a 25-basis-point increase at the December meeting, alongside a smaller possibility of a 50-basis-point move.

Higher interest rates can weigh on Bitcoin because they make yield-bearing investments more attractive relative to assets that do not generate regular income. Rising Treasury yields and a stronger US Dollar therefore added pressure to cryptocurrency prices.

ETF Outflows Add to Bitcoin Selling Pressure

Institutional investment flows provided another indication of weakening demand. US spot Bitcoin ETFs recorded substantial withdrawals during the first part of November, extending a difficult period for funds tracking the cryptocurrency.

According to available flow data, the funds experienced approximately $1.28 billion in net outflows during November 2–6. Additional withdrawals were reported in the following sessions, reinforcing concerns that institutional investors were reducing exposure.

Spot ETFs hold Bitcoin on behalf of investors, so sustained withdrawals can signal weaker demand for the underlying asset. However, fund flows are only one market indicator and do not independently determine Bitcoin’s direction.

The political backdrop also contributed to uncertainty. Democrats secured majorities in both chambers of Congress in the November midterm elections, ending unified Republican control. Their policy priorities could influence future discussions over cryptocurrency oversight, anti-money-laundering requirements and investor protections.

Altcoins Decline as Market Caution Spreads

Selling extended across major digital assets as traders reduced exposure to risk-sensitive cryptocurrencies.

Market prices showed the following declines:

• Ethereum (ETH): Fell 2.4% to $2,054.29.
• XRP: Dropped 2.8%.
• Solana (SOL): Declined 2.4%.
• Cardano (ADA): Lost 1.5%.
• BNB: Slid 1.7%.
• Dogecoin (DOGE): Fell 2.6%, while the $TRUMP token edged 0.2% higher.

Conclusion

Bitcoin’s move below $74,000 reflects the combined pressure of persistent inflation, stronger expectations for Fed tightening and continued ETF withdrawals. The outlook will depend heavily on upcoming US economic data and whether investors continue to anticipate higher borrowing costs. If yields and the Dollar remain elevated, Bitcoin and other cryptocurrencies could face further selling pressure. A moderation in inflation or a recovery in institutional demand could help stabilize the market.