Bitcoin News Today: Bitcoin's Plunge: Bear Market Signal or Structural Support?

Bitcoin's recent price slump has intensified concerns about its spillover effects on U.S. equities, with analysts warning of a potential synchronized downturn. The cryptocurrency fell below $95,000 last week, its lowest since March, as a confluence of waning Federal Reserve rate-cut hopes, liquidity strains, and profit-taking by long-term holders triggered a sharp selloff according to Reuters. The S&P 500 has mirrored the decline, dropping 2.8% over the same period, raising alarms about a broader market correction.

The decline has hit Bitcoin miners and publicly traded crypto firms hard. American Bitcoin (ABTC), a company 20% owned by Donald Trump Jr. and Eric Trump, reported a third-quarter profit of $3.47 million-a turnaround from a $576,000 loss the prior year-but its shares tumbled 13% in pre-market trading alongside the broader crypto slump. The firm's BTC holdings rose to 4,004, yet the falling price of bitcoin erased gains in its mining operations.

Market sentiment worsened as U.S. government data releases were suspended during a 43-day shutdown, creating an "information vacuum" that amplified uncertainty. ETF flows underscored the turmoil: U.S. Bitcoin ETFs recorded $869 million in outflows on November 13, with BlackRock's IBIT and Fidelity's FBTC leading the exodus. Despite this, cumulative inflows since January 2024 remain robust at $59.34 billion, reflecting institutional resilience.

Analysts linked the crypto selloff to broader macroeconomic anxieties. A Fed rate cut in December, once seen as likely, now has only a 45% probability, per CME Group's FedWatch tool, as policymakers signaled caution amid inflation concerns. "Bitcoin's price action is a leading indicator for U.S. stock trends," said eToro's Bret Kenwell. A sustained break below $90,000 could trigger a "cascade of price decreases", he added.

Long-term holders (LTHs) have exacerbated the downturn, selling across all age groups and contributing to a $617 million liquidation event in 24 hours. Meanwhile, liquidity strains-exacerbated by the government shutdown have pushed Bitcoin's Fear & Greed Index to an "extreme fear" reading of 10. "Tight funding conditions and shifting rate expectations are the immediate culprits, not a breakdown in crypto fundamentals," said MHC Digital's Edward Carroll according to The Block.

Yet some see a floor forming. Bernstein's Gautam Chhugani noted that institutional adoption of Bitcoin via ETFs and the Trump administration's pro-crypto stance provide a structural underpinning. MicroStrategy's $835 million in new Bitcoin purchases and the debut of XRP and multi-coin ETFs also signal diversification in crypto investing.

Technical indicators point to a critical juncture. Bitcoin must hold above $88,000 to avoid bear market territory, with a break below the 50-week moving average ($103,000) signaling deeper weakness. For now, the market remains in a "consolidation phase," according to Kenwell, with outcomes hinging on liquidity injections and Fed policy clarity.