Five consecutive weekly losses leave Bitcoin facing further downside risk

The $70,000 threshold has failed to provide support for Bitcoin (BTC), with the Crypto King falling below that level as several headwinds threaten further losses. The widely expected “Uptober” rally did not emerge. Instead, sustained selling and widespread liquidations have strengthened the “Rektober” narrative, which describes an October characterised by steep losses rather than the gains traditionally associated with the month.

The decline has continued into November. Muted institutional appetite, cautious positioning in derivatives and worsening on-chain indicators collectively point to weakening market confidence. 

Further supporting the bearish case are lingering inflation worries, a firmer US Dollar (USD), the Binance hack and MSCI’s decision to exclude major Bitcoin treasury holding companies from its global indices. These developments are weighing on risk-sensitive assets and raising the likelihood of a major storm approaching the Crypto King.

Persistent inflation brings rate-hike concerns back into focus

Liquidity conditions have a strong influence on the largest cryptocurrency by market capitalisation, leaving it exposed to tighter monetary policy. As interest rates rise and liquidity shrinks, the opportunity cost of owning non-yielding assets such as BTC increases, typically putting them under pressure. Investors instead favour safe-haven assets, including the Greenback and US Treasury bonds.

Economic conditions during November have broadly supported the Federal Reserve (Fed) in its efforts to keep monetary policy relatively restrictive. This has underpinned USD while weighing on risk assets. 

October’s US employment figures, published in the first week of November, exceeded expectations and demonstrated that the US labour market is still resilient. That gave the central bank less incentive to loosen policy. Subsequently, US Consumer Price Index (CPI) figures for October also came in above expectations, reinforcing the prospect of tighter monetary conditions.

The CPI release, in particular, increased the likelihood of a Fed interest rate rise in December. According to Fed Governor Christopher Waller, an upside surprise in core CPI could lead him to consider a larger 50-basis-point (bps) increase at the 8–9 December policy meeting. Restricting the rise to 25 bps, he added, could jeopardise the Fed’s credibility.

Against a backdrop of mounting inflation worries, this hawkish position has lifted both 10-year US Treasury yields and the DXY Index, putting the Crypto King’s price under pressure.

Institutional demand loses momentum

Among institutional investors, demand in the spot market is weakening too. Net withdrawals from US-listed spot Bitcoin exchange-traded funds (ETFs) exceeded $500 million in October. Outflows have since accelerated to $1.88 billion so far in November, the largest monthly total since June.

Unlike the substantial inflows seen in August and September, this deterioration in investor sentiment and demand has taken away a reliable source of buying that had previously absorbed selling pressure and cushioned its impact.

MSCI exclusions put pressure on major corporate BTC holders

This week brings a further setback for corporate demand, historically a source of support for Bitcoin during steep corrections. Global index provider MSCI announced on Wednesday that Strategy would be excluded from its global indices, the MSCI USA Index and the MSCI World Index. With 850,364 BTC currently on its books, Strategy is Bitcoin’s largest corporate holder.

To align their portfolios with the changes, index funds following the affected benchmarks may have to sell their Strategy shares by 30 November. The MSCI decision concerns Strategy’s shares directly, not its Bitcoin holdings. Nevertheless, its implications could reach the cryptocurrency because the company holds the largest Bitcoin treasury.

The exclusion list also includes Tokyo-listed Metaplanet, another company that acquires and holds BTC. Its removal from the MSCI Japan Small Cap Index takes effect on 1 December.

Such potentially forced share disposals could pressure these BTC-holding companies’ share prices and have an indirect effect on sentiment towards BTC. These businesses offer institutions a route to Bitcoin exposure. Persistent selling of their shares could therefore weaken confidence in corporate Bitcoin treasury strategies, creating an additional obstacle to BTC’s recovery.

Rising leverage leaves Bitcoin exposed to sharp swings

Within derivatives markets, the likelihood of abrupt price swings remains high for the Crypto King, with leverage still accumulating.

This week, Open Interest (OI) in BTC perpetual futures totals 353,000 BTC, placing it in the 99th percentile of readings over the past two years. Annualised funding rates, meanwhile, have averaged 8.4% over the past week. That points to continued appetite for long exposure while BTC tests important support levels.

Comparable levels of open interest have historically accompanied price extremes and pronounced volatility, frequently ahead of sharp reversals. High leverage helped drive gains in June and August, but positioning now appears less directional, leaving ample room for volatility on either side. A break lower could prompt sizeable liquidations of long positions; a rebound, by contrast, could encourage short covering. In either case, the unwinding of leveraged positions could magnify price movements.

Falling prices lack a regulatory catalyst for support

The change in the US political landscape, with both the House and Senate under Democratic control, presents renewed concerns for the cryptocurrency sector. The shift in control of Congress could hold up or delay key legislation affecting the industry, including the CLARITY Act, which seeks to create a clearer regulatory framework for digital assets.

Uncertainty has also increased as investors weigh how a Democrat-controlled Congress could affect crypto and AI regulation once the new Congress assembles on 3 January 2027. 

With no immediate bullish catalyst in sight, the possibility that regulatory clarity will be delayed remains a drag on market sentiment.

Stolen BTC and ETH remain a source of market risk

The cyberattack in late October on Binance, the largest centralised cryptocurrency exchange, remains a drag on sentiment. Nevertheless, the exchange has borne the full financial cost and had restored affected users’ balances by Thursday, drawing on its corporate treasury, Secure Asset Fund for Users (SAFUs) fund and other internal resources.

Around $3 billion of stolen assets reportedly remains in the attackers’ hands, however. Most of it is in BTC and ETH, which are not easily frozen. Renewed movement of those funds could trigger another wave of FUD (fear, uncertainty, and doubt) across the market.

On-chain liquidity contracts as available buying power shrinks

USDT stablecoin liquidity is shrinking at its quickest 60-day rate since 2022, according to on-chain figures from CryptoQuant. 

As of Thursday, Tether’s market capitalisation had fallen by $7.81 billion over the past 60 days, as illustrated in the chart below. The decline is its largest since mid-2022, exceeding the $3.15 billion level of post-FTX exchange redemptions recorded on 31 December 2022.

The supply of stablecoins provides a measure of readily deployable liquidity, or dry powder, in the cryptocurrency market. A reduction in that supply leaves less capital available to enter BTC, constraining new buying demand. 

Growth in stablecoin supply has accompanied Bitcoin’s rallies in the current market cycle. The latest contraction consequently represents another impediment to a recovery.

Bitcoin breaks below a key support zone in technical analysis

Since early October, the Crypto King has undergone a correction, registering five successive weekly losses totalling more than 13%. Last week it closed beneath the important 50-week Simple Moving Average (SMA) at $75,099. Losses have extended by more than 8.2% this week, with BTC changing hands below $69,000 on Friday.

A continuation of the correction could take BTC towards the 200-week SMA at $67,998. A weekly close beneath that level would point to a further decline towards $60,000, a key psychological threshold.

At 41, the weekly Relative Strength Index (RSI) sits below the neutral level of 50, signalling that bullish momentum is fading. The Moving Average Convergence Divergence (MACD) histogram has also printed a red bar this week, lending further weight to the bearish case.

Conversely, a rebound in BTC could carry it towards the 50-week SMA at $75,099. Should the price close above that level and hold it, the recovery could continue towards the 61.8% Fibonacci retracement at $78,661, measured from the August 2024 low of $49,000 to the October 2025 record high of $126,199.

Viewed together, prevailing market conditions suggest a growing risk that a major storm is approaching the Crypto King. Downside risks for Bitcoin are likely to stay elevated until institutional demand steadies, liquidity improves and leveraged positioning resets. That leaves a sustained recovery difficult to achieve and increases the likelihood of a deeper correction.