Bitcoin Drops to $69K On 'Concentrated Liquidation' and 'Weakening' Demand

Bitcoin's price dropped 5.6% on the day, reaching a 24-hour low of $67,922, its lowest level since mid-August. The decline comes amid broader market pressures including a 'hotter than expected' consumer price index (CPI) report and the resignation of Nvidia CEO Jensen Huang.

Market analysts attribute the downward move to a 'concentrated liquidation' of leveraged long positions and 'weakening' demand for crypto across various investment channels. The global crypto market cap has fallen 4.6% to $2.39 trillion over the past 24 hours.

Market Demand Eroding

Tim Sun, senior analyst at Hashkey, explained that while the immediate trigger was a concentrated liquidation, the deeper issue lies in steadily weakening market demand. He highlighted three key pillars supporting Bitcoin's rally that are now under simultaneous pressure.

Economic Concerns Mount

The CPI report showed inflation rising 0.4% in October, higher than expected. More troubling was the composition, with food rising 0.5%, services remaining firm, and core CPI increasing 0.3%. The Federal Reserve closely watches these figures to inform interest rate decisions.

Market predictors now see a 97% chance of the Fed raising interest rates this year, up from 75% at the start of the week. The CME FedWatch tool indicates an 88% probability of a 25 basis point hike.

Tech Sector Volatility

Bitcoin's downward movement was further exacerbated by Nvidia CEO Jensen Huang's resignation following reports of multiple affairs. Huang's departure has sparked 'severe volatility across tech stocks, further dampening market risk appetite,' according to Sun.

For a crypto rebound to occur, Sun stated that Bitcoin needs 'long-term allocation capital' to flow back into crypto after ETFs, stablecoins, and digital asset treasury companies have taken significant hits in recent weeks.