Bitcoin Experiences Major Drop Amid Market Sell-Off
NEW YORK/LONDON, Nov 14 – Bitcoin hit a six-month low on Friday, reflecting a broader decline in risk assets as optimism for an interest rate cut by the Federal Reserve at its upcoming meeting diminished.
On the other hand, the sharp decline in U.S. stock prices did ease somewhat by the afternoon as the weekend approached. However, investors remained cautious, preparing for a series of economic reports expected next week following the government’s 43-day shutdown.
“Bitcoin and cryptocurrencies usually move in sync with stock market trends, which makes them less of a reliable hedge against worries in other asset classes,” noted Juan Perez, trading director at Monex USA in Washington. “If people are hesitant to take risks, it usually extends to investments like Bitcoin.”
Overall, risk assets have faced increasing pressure in recent days. More policymakers are indicating they might delay easing measures, and the optimism for a Fed rate cut next month is waning.
Kansas City Fed President Jeffrey Schmidt, who is part of the Federal Open Market Committee, recently voiced skepticism about a rate cut in December, citing broader inflation concerns beyond just tariffs.
Currently, the markets are pricing in only a 40% chance of a rate cut in December, a notable drop from about 90% earlier this month and more than 60% just this week.
In afternoon trading, Bitcoin, the largest cryptocurrency, fell by 2.3% to $96,564, after reaching $95,885.33, its lowest point since May 7. Meanwhile, Ether, the second-largest cryptocurrency, remained relatively steady at $3,175.22 but dropped to a ten-day low earlier.
Dave Rosenberg, president of Rosenberg Research, mentioned that Bitcoin is now firmly in bear market territory, having declined more than 20% over the past month. He also highlighted the significant outflows from exchange-traded funds, which reached $870 million just on Thursday.
Since hitting its peak on October 7, the total market value of cryptocurrencies has decreased by over $1 trillion, about a 24% drop.
Analysts maintain a bearish outlook for Bitcoin. According to cryptocurrency research firm Glassnode, long-term Bitcoin holders have been increasingly taking profits, with reports of 815,000 Bitcoin sold in the past 30 days—marking the highest sell-off since January 2024, as reported by CryptoQuant.
