Bitcoin News Today: Bitcoin's Plunge Clashes with Japan's Stimulus in Global Liquidity Paradox

Bitcoin's price has plummeted to a seven-month low, leaving average investors in the red as U.S. spot Bitcoin exchange-traded funds (ETFs) hemorrhage billions in outflows. The selloff, which has erased roughly 30% of the cryptocurrency's value since hitting a record high of $126,000 in October, has been exacerbated by macroeconomic uncertainty and bearish technical signals. BlackRock's iShares Bitcoin Trust (IBIT), the largest Bitcoin ETF, recorded a record $523 million outflow in a single day on Nov. 18-marking the fund's worst performance since its January 2024 launch.

The sell-off coincided with Japan's approval of a $135.4 billion stimulus package on Nov. 21, its largest since the pandemic. Prime Minister Sanae Takaichi's government framed the measure as a lifeline for households and businesses grappling with inflation, which has exceeded the Bank of Japan's 2% target for 43 consecutive months. The plan includes JPY 17.7 trillion in general account outlays and JPY 2.7 trillion in tax cuts, dwarfing last year's JPY 13.9 trillion stimulus. While the yen weakened to its lowest level since January 2025 and 40-year bond yields surged to 3.697%, analysts debated whether the move would boost Bitcoin demand via liquidity injections or trigger global deleveraging that pressures risk assets.

Bitcoin's price has fallen below $85,500, extending a sell-off that began after the cryptocurrency hit an all-time high in October. The drop has pushed most ETF investors into losses, with the average entry price for spot Bitcoin ETF buyers now near $90,000. The ETF outflows have accelerated as the Federal Reserve's December rate-cut odds dipped below 50%, and technical indicators turned bearish. A "death cross" pattern-where short-term momentum falls below long-term averages-has deepened caution, while Bitcoin's price has broken key support levels, including the 50-day and 200-day moving averages.

Bitcoin's price has broken critical support levels on its way to a seven-month low. This has triggered widespread redemptions in spot ETFs and deepened bearish sentiment. The market's reaction to Japan's massive fiscal stimulus remains under scrutiny, as analysts debate whether the move will trigger broader deleveraging or boost liquidity in the digital asset space.

The ETF exodus has been historic. U.S. spot Bitcoin ETFs recorded $3.79 billion in outflows in November, surpassing February's previous record of $3.56 billion. BlackRock's IBIT alone shed $2.47 billion this month, accounting for 63% of total redemptions, while Fidelity's Wise Origin Bitcoin Fund lost $1.09 billion. The sell-off has coincided with Bitcoin's drop to $83,461 on Nov. 21-a seven-month low-and triggered widespread liquidations, with $243.56 million in Bitcoin positions wiped out in 24 hours.

Market observers are divided on the implications. Some argue that the outflows reflect a shift in capital to altcoins like Solana and XRP, which have attracted inflows as Bitcoin ETFs bleed. Others warn that the correction could deepen, with Alliance DAO co-founder QwQiao suggesting markets may need another 50% drawdown to establish a durable base. Meanwhile, the $80,000 strike price for Bitcoin put options has seen $2.05 billion in open interest, signaling widespread hedging against further declines.

Japan's stimulus and Bitcoin's turmoil highlight a paradox: a currency-weakening fiscal policy that could theoretically boost Bitcoin demand is instead fueling global deleveraging. As ETFs shrink and institutional investors recalibrate, the path forward for Bitcoin remains uncertain. For average investors, the message is clear: a once-vaunted hedge against inflation has become a volatile asset with no guaranteed direction.