Bitcoin slips to $65,000 as dollar strength and Fed hike bets weigh on prices

What happened

Bitcoin was trading near $65,200 on Saturday morning after dipping to about $65,000, the weakest level since mid-August, according to Bitcoin Magazine Pro data cited by Bitcoin Magazine. The move broke below Friday's low of roughly $67,555 and capped a week in which the price fell about 14%, from near $75,750 on Nov. 7.

The decline unfolded in stages. Bitcoin slid toward $71,000 on Thursday evening, dropped to about $67,555 shortly after midnight Eastern on Friday, then recovered toward $69,800 in the morning. A short-lived push above $70,000 following the producer-price report faded, and the price spent Friday afternoon below that mark near $68,900. Selling resumed Friday evening and carried into the mid-$66,000s, with a brief pause near $67,000 overnight before another drop after 8 a.m. ET Saturday produced a low around $65,500 in the 10 a.m. hour.

Two days earlier, Coinpedia had described $65,000 as a risk rather than a reality. In a Nov. 12 article, the outlet reported a nearly 9% seven-day decline and warned that bitcoin could first test $71,000 and $70,000 before a possible move toward $65,000. The two reports, published two days apart, capture different points in the same selloff.

Why it matters

The drivers behind the move are macroeconomic rather than crypto-native. Higher interest rates raise the cost of holding an asset that produces no yield, and a firm dollar has been a persistent drag on bitcoin through November. Weekend trading is typically thin, which leaves the price more exposed to sharp swings in either direction, and the drop came while U.S. stock and bond markets were closed. Spot bitcoin ETF flows have offered little support, with BlackRock's fund recording a long run of net outflows.

What the data shows

The Labor Department reported that the Producer Price Index for final demand rose 0.3% in October, below the 0.4% economists expected, while the unadjusted index was up 6.5% year over year, the largest 12-month gain since November 2022. The 10-year Treasury yield reached 5.17% on Friday, a four-week high, and closed at 5.15%, and the dollar index held at a 19-month high. CME FedWatch data showed traders fully pricing a quarter-point hike at the Fed's Dec. 8-9 meeting. The iShares Semiconductor ETF fell more than 3% on Friday, Advanced Micro Devices lost more than 8% and the Nasdaq 100 closed down 1.22%. On flows, IBIT shed $2 billion across nine consecutive days of outflows through Wednesday, while Coinpedia reported nearly $1.9 billion in November ETF outflows and about 20,000 BTC sold by whales in the first 12 days of the month. Mining difficulty fell 9.13% at 12:02 a.m. ET Saturday at block 975,744, from about 148.36 trillion to 134.82 trillion, the largest cut since June.

Background

Bitcoin Magazine linked the steepest part of the decline to the resignation of Nvidia chief executive Jensen Huang on Thursday, a shake-up that triggered a selloff in AI-related stocks. Chip shares provided no cushion on Friday, and Nvidia is scheduled to report third-quarter results on Tuesday under interim CEO Colette Kress. Federal Reserve officials also shaped expectations: Boston Fed President Susan Collins said additional tightening "may be appropriate" soon, and San Francisco Fed President Mary Daly said policymakers will "in all likelihood, raise interest rates." Coinpedia additionally noted that bitcoin had broken below the $75,000 support level and its 200-day EMA, and cited U.S. political uncertainty and rising inflation among the factors weighing on crypto.

What to watch

Attention now turns to whether Saturday's slide holds below Friday's $67,555 low. Nvidia's earnings on Tuesday will be watched for signs of whether the chip-stock weakness that accompanied bitcoin lower this week continues. With a December rate hike fully priced and the dollar near multi-month highs, any further rise in yields when markets reopen could maintain pressure. Bitcoin was near $65,100 at the time of Bitcoin Magazine's report.

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