The U.S. headline CPI (Consumer Price Index) was up 0.4% in October, compared to a 0.3% expectation. The metric’s brisk rise for the third straight month signalled that underlying inflation pressure was building up.
Inflation pressures came from high oil prices (due to the conflict with Iran) and import tariffs, alongside robust household and business spending.
On Tuesday, the 10th of November, Fed Governor Christopher Waller raised the prospect of an interest rate hike of 50bps.
Unlike the previous Federal Open Market Committee (FOMC) meeting, there is no debate now about whether the Fed should pause or hike, but rather whether the December meeting will result in a 25 bps or 50 bps rate hike.
As a risk-on asset, Bitcoin and the rest of the crypto market are likely to suffer reduced capital inflows and lower demand. Retail pessimism was high, and there is debate around whether it is a good time to buy or still too risky.
Table of Contents
Current market conditions favour caution
The loss of the $80k level towards the end of October, alongside negative apparent demand, was a warning sign of further losses. Shark accumulation while the leading crypto’s price held above $75k was hopeful, but ultimately the sellers won the battle.
An improvement in risk-to-reward for buyers was highlighted, but it was too early to jump in. A short-term holder P&L flow to exchange divergence looked compelling, but has not resulted in any positive price reaction or recovering demand yet.
Meanwhile, institutional selling carried on. AMBCrypto reported that 14 companies have sold 108,247 BTC so far in 2026, worth around $8.08 billion. The biggest was MARA Holdings, which sold 40,581 BTC worth $3.03 billion as it worked to pivot to operating AI/HPC data centres.
Since the 5th of November, every BTC spot ETF trading day has seen outflows. Cumulatively, the figure has reached $1.484 billion in the previous six ETF trading days, at the time of writing.
The Bitcoin short-term holder supply has increased compared to the long-term holder supply. AMBCrypto reported that this pointed to increased price sensitivity towards short-term price swings.
During August’s explosive rally beyond $80k, there was an imbalance, also known as a fair value gap (FVG), on the weekly chart, from $65,391 to $76,670.
Bitcoin has dived into this imbalance already
At the time of writing, the price was sinking into this FVG. Moreover, the midpoint of the FVG at $71,030 was breached. A weekly session close below this midpoint will confirm bearish strength.
As things stand, the strong downward move could also be part of a leverage purge.
Within just three months, the price has retraced into a key demand zone on the weekly chart. This timeframe’s bias remains bullish, and the pullback is still healthy. A session close below $64,133, the 78.6% Fibonacci retracement level of the swing move higher to $87,395, would be a sign that the bullish woes were about to extend.
Bitcoin is still in a bullish market regime, resembling March 2023 conditions
The 6-month liquidation heatmap showed that clusters of liquidity built up around $74k and $68k have been taken out. The next major liquidity pocket to watch was $61.7k, with $64k-$65k also a region to watch.
Price is likely to be pulled lower to these areas in the coming days or weeks.
The realized price of different holder cohorts above showed that the short-term holders were mostly underwater. The 3-6 month cohort has its realized price at $65k, marking an important on-chain support level.
This level has a confluence with the liquidation heatmap, as well as the weekly imbalance. Hence, swing traders and investors have to be prepared for the possibility of a retest of this realized price level.
The adjusted MVRV metric employs both the 30-day and 365-day MVRV ratios to capture short-term capital inflows and momentum, as well as mark out the macro cost basis trend.
The aMVRV was above the baseline to signal a bull market phase crossover. Hence, the Bitcoin market regime has passed early bull territory and is in a bullish regime.
The deep price pullback in recent weeks was similar to the price pullback from $25,250 to $19,549 in March 2023. Back then, the market remained within a bullish phase despite the deep setback.
The bearish market pressure should not be taken lightly, data shows. At the same time, Bitcoin has a chance of recovery if it can hold above $64k-$65k.
This hold will likely look like a consolidation phase, followed by easing loss-selling and short-term holder panic. If these conditions are met, and others such as ETF capital inflows to signal sentiment recovery come true, investors can have more faith in a return to a bull market.
Final Summary
- Rising institutional and retail selling, short-term holder sensitivity, and cascading liquidations have pushed Bitcoin below $73k and into a higher timeframe imbalance.
- This foray into the thinly traded pocket was still within a bull market phase. Buyers must defend the $65k zone to keep the bull thesis alive.
