Bitcoin Slides as Fed Rate Hike Odds Spike
Bitcoin dropped below $73,000 on Thursday, November 12, 2026, touching $72,735 on Binance, as the Federal Reserve's potential interest rate hike and a hotter-than-expected inflation report rattled cryptocurrency markets. The world's largest digital asset by market capitalization stood at $73,208.24 at 6:30 a.m. Eastern Time, down $729.54 from the previous morning and nearly 28% lower than a year ago, according to Fortune.
The decline was part of a broader crypto sell-off that saw Ethereum lose 16.4%, Solana fall 14.7%, and XRP drop 21.3% over a seven-day stretch from the November 4 close. The total cryptocurrency market value stood at $2.42 trillion on Thursday, with Bitcoin accounting for 60.5% of that total, according to CoinGecko data cited by El-Balad.com.
Liquidations Surge as Leveraged Traders Feel the Pain
The price action was preceded by a massive wave of forced selling. On Monday, November 9, $1.15 billion was liquidated across crypto derivatives, with approximately $1.04 billion coming from long positions. An additional $723 million was liquidated on Tuesday, November 10, with roughly $570 million from longs. The initial trigger was reports of a probe involving Jensen Huang and stalled U.S.-Iran talks, but the sell-off intensified after a hot inflation report lifted expectations that the Federal Reserve could hike interest rates in December.
Despite the carnage, many traders remain positioned for a rebound. On OKX, there were 3.11 long accounts for every short account as of Thursday, up from 2.43 on November 4. Open interest on the exchange's Bitcoin futures stood at $3.85 billion, unchanged from before Monday's flush, suggesting that leverage remains elevated and could fuel another round of selling if support levels break.
Why the Fed's Next Move Matters for Crypto
The Federal Reserve's monetary policy has become a dominant driver of Bitcoin's price in 2026. After raising rates in September for the first time since July 2023, the central bank held its target range at 3.75% to 4.00% in late October. But the hotter inflation report has shifted market expectations toward another hike in December, which would make yield-bearing assets like Treasury securities more attractive relative to riskier assets like Bitcoin.
A Hawkish Voice on Inflation
The inflation concerns were amplified by comments from Cleveland Fed President Beth Hammack, who argued in an October 12 speech that the artificial intelligence boom is creating real price pressures in the U.S. economy. Hammack cited soaring demand for data centers and technology components, which is driving up prices for key tech parts and rippling into related industries including aviation, power generation, and construction. Her staff estimates underlying inflation in the mid-to-high 2% range, above the Fed's 2% target.
"Demand for electrical switching equipment is insatiable," Hammack said in June 2026, according to Crypto Briefing. She is generally seen as a hawk within the Fed, favoring restrictive monetary policy to bring inflation back to target. If AI spending keeps prices elevated, she believes the central bank cannot afford to relax.
Dollar Strength Adds Pressure
The Federal Reserve's rate trajectory also influences Bitcoin through its impact on the U.S. dollar. The U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, climbed to approximately 102 by early November after falling to around 96 in late January, its lowest level in about four years. Bitcoin has lost more than 15% of its value since the start of the year, according to North Forty News.
The inverse correlation between Bitcoin and the dollar was particularly evident in April, when CoinDesk reported that the 30-day correlation reached minus 0.90, its most extreme reading in nearly four years. A stronger dollar makes dollar-priced assets more expensive for buyers using other currencies, which can weigh on demand.
Broader Market Implications
The current downturn underscores Bitcoin's growing sensitivity to macroeconomic conditions and Federal Reserve policy. With the Fear & Greed Index at 28 (Fear) and the crypto market down 3.2% in 24 hours, sentiment remains fragile. The concentration of liquidations among long positions suggests that many traders were caught off guard by the Fed's hawkish shift.
A sustained break below current support levels could trigger another cascade of forced selling, as the high open interest on exchanges like OKX leaves little room for error. Conversely, if the Fed signals a pause in December or inflation data cools, Bitcoin could find relief. For now, all eyes remain on the Federal Reserve and its next policy decision, which could determine whether Bitcoin's slide continues or stabilizes.
Comments