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Bitcoin price has fallen below $74,000 after US inflation came in hotter than expected in October, raising concerns that the Federal Reserve could increase interest rates at its December meeting.

• Bitcoin fell below $74,000 on November 10 and was down around 4.5% over the past week, with selling pressure continuing across the cryptocurrency market.

• US headline inflation rose 0.4% in October, while core CPI climbed 0.3%, with both readings exceeding economists’ expectations and raising concerns over Federal Reserve interest rates.

• US spot Bitcoin ETFs recorded approximately $1.28 billion in net withdrawals during the first week of November, followed by another $201 million in outflows on November 9.

• Analysts identified $73,000 as an important support level for Bitcoin, with a sustained decline below it potentially exposing the cryptocurrency to further losses towards $70,000.

According to crypto.news data, Bitcoin was trading around $73,784 on November 10, down approximately 1% over the past 24 hours after reaching an intraday high near $75,500.

The cryptocurrency has lost 4.5% over the past week and more than 11% over the last 30 days, with the latest decline following the release of US consumer inflation figures that exceeded economists’ forecasts.

Hot US inflation data puts Bitcoin price under pressure

The US Bureau of Labor Statistics reported Tuesday that the Consumer Price Index rose 0.4% month over month in October, compared with economists’ expectations of 0.3%.

Although headline inflation slowed from September’s 0.6% reading, the latest figure suggested that price pressures remained stronger than the Federal Reserve would have preferred.

Core CPI, which excludes volatile food and energy prices, rose 0.3% for the third consecutive month, exceeding the 0.2% increase economists had forecast.

The report showed that shelter costs rose 0.3%, accounting for more than 30% of the monthly increase in consumer prices. Food prices climbed 0.5%, while energy costs rose 0.7%, considerably slower than September’s 5.2% increase.

The Labor Department did not publish annual inflation figures for October because last year’s government shutdown prevented officials from collecting the data needed for a year-over-year comparison.

Following the release, Bitcoin briefly fell towards $73,500, while approximately $200 million in leveraged cryptocurrency positions were reportedly liquidated within five minutes.

The selling followed an already difficult start to November, with investors increasingly concerned that persistent inflation could leave the Federal Reserve with little room to ease monetary policy.

Federal Reserve rate hike expectations rise after CPI

The latest inflation figures have strengthened expectations that the Federal Reserve will raise interest rates at its December 9 meeting.

According to Reuters, financial markets had fully priced in a 25 basis point increase, which would take the federal funds target range from 3.75%-4.00% to 4.00%-4.25%.

Federal Reserve Governor Christopher Waller had warned earlier Tuesday that policymakers should consider a larger 50 basis point increase if inflation remained stubbornly high.

His comments came after stronger US employment figures showed that the economy added 165,000 jobs in October, giving policymakers another reason to maintain a restrictive monetary stance.

Higher interest rates generally make interest-bearing assets more attractive and can reduce investors’ willingness to hold cryptocurrencies and other riskier investments.

Bitcoin had already been struggling with uncertainty over interest rates before Tuesday’s report, particularly as expectations for another December increase continued to build.

Investors will next receive the October Producer Price Index on November 13, followed by the Federal Reserve’s October meeting minutes on November 18.

Bitcoin ETF withdrawals continue as institutional demand weakens

Beyond the inflation report, Bitcoin has faced sustained selling pressure from US spot exchange-traded funds.

As crypto.news previously reported, spot Bitcoin ETFs recorded approximately $1.28 billion in net withdrawals between November 2 and November 6.

BlackRock’s iShares Bitcoin Trust accounted for roughly $1.21 billion of those withdrawals, while Fidelity’s FBTC attracted $93.1 million during the same period.

The outflows continued on November 9, when investors withdrew another $201 million from US spot Bitcoin funds, including $213.2 million from BlackRock’s IBIT.

Meanwhile, Bitfinex analysts found that Bitcoin’s earlier recovery towards $80,000 had been supported largely by leveraged futures positions, with direct spot buying remaining relatively weak.

The cryptocurrency’s failure to reclaim $75,000 had already raised concerns about whether buyers could sustain another recovery without stronger institutional demand.

Bitcoin price risks further losses below $73,000

Bitcoin’s latest decline has brought several important support levels back into focus.

Analysts at BRN identified $73,000 as a critical level, warning that a daily close below it could trigger further selling towards $70,000.

Bitget Wallet analysts identified the 73,000-74,000 region as immediate support, with a decisive breakdown potentially exposing Bitcoin to a decline towards $68,000.

A separate Bitcoin price assessment from Bitfire Research had previously identified the 74,400-75,000 range as an important area for buyers to defend.

On the upside, analysts said Bitcoin would need to reclaim $80,000 and maintain stronger spot demand before a more sustained recovery could develop.

Hilbert Group chief investment officer Russell Thompson warned on November 9 that a breakdown below $71,900 could eventually expose Bitcoin to $65,000, particularly if weakness in technology stocks forces leveraged investors to reduce their positions.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.