Bitcoin Update: Federal Reserve's Balancing Act and Death Cross Indicate Extended Bitcoin Downturn

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Bitcoin Update: Federal Reserve's Balancing Act and Death Cross Indicate Extended Bitcoin Downturn

Bitget-RWA2025/11/19 17:40

By:Bitget-RWA

- Bitcoin fell below $91,000 amid $3B ETF outflows, technical "death cross" signals, and shifting Fed policy expectations. - BlackRock's IBIT saw record $523M outflows, while Mubadala tripled Bitcoin holdings despite market volatility. - Fed officials split on December rate cuts (46% chance now vs. 93.7% earlier), with Waller citing weak labor markets. - Stablecoin balances hit 11-month lows, Nansen traders added $5.7M short positions, and XRP derivatives stagnated. - Bitcoin and Ethereum entered technical

Bitcoin’s recent drop below $91,000 has heightened worries about a larger market downturn, fueled by a mix of ETF withdrawals, changing expectations for Federal Reserve policy, and negative technical trends. The cryptocurrency’s losses have been deepened by

an unprecedented $523 million withdrawn

from BlackRock’s

iShares Bitcoin Trust

(IBIT) in just one day on Tuesday, contributing to nearly $3 billion pulled from U.S.

Bitcoin

ETFs throughout November. This wave of selling, along with ongoing outflows from

Ethereum

and

XRP

ETFs,

points to declining interest from both institutional and retail investors

The Federal Reserve’s tightening measures have become a major talking point. Fed Governor Christopher Waller, who supports a 25-basis-point rate reduction at the December 9–10 meeting,

referenced a “softening job market” and slower economic expansion

as reasons for his view. His position differs from more hawkish members, adding to the uncertainty about the Fed’s next steps. Currently, markets

estimate a 46% probability of a rate cut in December

, a steep drop from 93.7% just a month earlier. Meanwhile, Abu Dhabi’s Mubadala Investment Co. has tripled its Bitcoin assets in recent months,

indicating continued institutional faith despite turbulence

Bitcoin Update: Federal Reserve's Balancing Act and Death Cross Indicate Extended Bitcoin Downturn image 0

Technical signals are also highlighting a bearish outlook. Bitcoin’s 50-day and 200-day exponential moving averages

have both fallen below the $106,000 mark

, creating a “death cross”—a pattern often seen as a negative indicator. The RSI has dropped into oversold levels, and

stablecoin reserves on exchanges have reached their lowest point in 11 months

at $85 billion, showing a shift toward risk aversion. At the same time,

top traders on Nansen’s platform

increased their short positions by $5.7 million within a single day, further fueling bearish expectations.

The recent selloff has also revealed weaknesses within the crypto sector. Tom Lee from Bitmine Immersion cautioned about financial shortfalls at two leading market makers, while the XRP derivatives market remains sluggish, with

open interest just above $3.85 billion

. These factors have pushed both Bitcoin and Ethereum into a technical bear market, with ETH dropping 35% from its yearly peak and BTC down 25%.

With the Fed’s December meeting approaching, investors are divided. While Waller’s dovish approach and Abu Dhabi’s aggressive investments provide some optimism, the broader economic environment—including political influences on the Fed and unresolved macroeconomic risks—suggests caution. For now, the market seems to be bracing for an extended downturn, with major support levels and institutional moves likely to determine the next trend.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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