Bitcoin Hits 12-Week Low as Fed Rate Fears Undo Most of Summer Rally

Bitcoin's price decline has been significant, with the cryptocurrency down about 4.5% over 24 hours and 9.5% for the week according to Friday market data. Ethereum traded near $1,925, while Solana slipped below $80 as selling pressure spread across major cryptocurrencies. Despite the recent slide, Bitcoin remains approximately 16% above its late-June low near $59,000, even after retreating roughly 21% from its autumn peak around $86,000.

Inflation Raises Stakes for December

Chicago Federal Reserve President Austan Goolsbee warned Friday that inflation had spread beyond energy and tariffs, with rising services and medical costs and demand from AI data centers adding to price pressures. He expressed uncertainty about returning to the 2% inflation target, stating: 'Are we on a path back to 2%? My feeling right now is we are not and we've got to deal with that.' Other Fed officials have been more direct about potential rate increases.

Fed Officials Signal Rate Hike

Fed Governor Christopher Waller explicitly stated his support for raising interest rates by at least 25 basis points at the December 8-9 meeting. He also established a threshold for considering a more aggressive increase, noting that if core CPI inflation remained at 0.3% or higher, a stronger policy move might be needed. The October CPI report showed core CPI rising exactly 0.3%, exceeding forecasts and meeting Waller's condition. Futures markets now show a 91.9% probability of a quarter-point increase and an 8.1% probability of a half-point increase in December.

ETF Withdrawals Deepen Selling Pressure

U.S. spot Bitcoin ETFs have registered six consecutive sessions of net outflows, totaling approximately $1.49 billion between November 5 and November 12. Thursday's $47.7 million withdrawal extended this streak, adding pressure to an already struggling market. While the funds still hold approximately $55.5 billion in cumulative net inflows, the consistent outflows indicate investor nervousness. Weakening ETF demand, combined with forced liquidations of leveraged traders, can accelerate a decline when buyers are scarce.

Technical Indicators Show Bearish Momentum

Bitcoin's daily chart confirms a bearish short-term trajectory with lower highs and lower lows. Its relative strength index (RSI) has dropped to 25.4, with readings below 30 generally considered oversold. The average directional index (ADX) stands at 25.3, indicating an established trend. While the 50-day exponential moving average remains above the 200-day EMA (preserving a bullish configuration), Bitcoin's price has fallen below the shorter-term average, indicating recent momentum has turned against buyers. Immediate support sits around $67,650, with a breach potentially exposing deeper support near $64,000.