Bitcoin spent the first days of November giving back almost everything it gained after the midterm elections. It jumped above $80,000 on November 4 after Democrats won both chambers of Congress, then dropped below $76,000 the next day as chip stocks sold off. On November 10 it fell to $72,787, its lowest level since August. By Thursday afternoon in London it traded near $71,650, with Ethereum around $2,004 and both coins down roughly 4% on the day. The Fear & Greed Index read 28, in "fear" territory.
The trigger was inflation. October CPI rose 0.4% against a forecast of 0.3%. Core inflation came in at 0.3%, above the expected 0.2%. The report landed on the same day Fed Governor Christopher Waller spoke in London. He said he would still back a quarter-point hike in December, and that a core reading around 0.3% or higher would justify considering a half-point move. After the data, CME FedWatch put the odds of a 50 basis point hike at 13.6% and a 25 basis point hike at 86.4%. The Fed held its range at 3.75% to 4.00% last month, and the next meeting is on December 8 and 9. A hike was already the base case before the CPI release.
Fund flows have added to the pressure. U.S. spot Bitcoin ETFs lost $1.28 billion from November 2 to 6, their largest weekly withdrawal since late June. Another $201 million left on November 9, including $213.2 million from BlackRock's IBIT. Year to date, the funds are now at net outflows of about $1.1 billion, after drawing around $25 billion by early November in each of 2024 and 2025.
Washington is a second source of uncertainty. The new Congress takes office on January 3, 2027, which brings two years of divided government. Ebury's Matthew Ryan said markets had already priced in gridlock after the freeze on the CLARITY Act, but that the result could make it harder for the Trump administration to advance crypto market structure legislation.
Technical readings look weak. Bitcoin trades below its 20, 50 and 200-day moving averages and under the lower Bollinger Band, though the oversold reading does not by itself confirm a reversal. Analysts had flagged the 200-day average near $73,200 as the level to watch, with the 200-week average near $69,500 as the next major support.
Several more data points arrive before the Fed decides. PPI, Nvidia's earnings and PCE inflation all land ahead of the December 9 announcement.
