Bitcoin News Today: Senate Crypto Vote Looms as ETFs Bleed $3.5B, Liquidity Shrinks

The cryptocurrency market is navigating a turbulent phase, with a recent $101 million liquidation event in futures contracts underscoring heightened volatility and shifting investor sentiment. This development, coupled with broader macroeconomic shifts and regulatory developments, has left traders recalibrating strategies amid uncertainty. The liquidation, which occurred in October, marked one of the largest single-day selloffs in crypto derivatives trading since mid-2022, reflecting a broader correction in Bitcoin and other major assets. Analysts point to a confluence of factors-including ETF outflows, declining liquidity, and macroeconomic anxieties-as drivers of the selloff.

Bitcoin's price has since retreated over 30% from its October peak above $126,000 to around $87,000, its steepest two-month drawdown in years. The decline has been exacerbated by $3.5 billion in outflows from Bitcoin exchange-traded funds (ETFs) in November, the largest monthly exodus since February. Products like iShares Bitcoin Trust (IBIT) and Grayscale's GBTC have seen sustained redemptions, signaling a pause in institutional accumulation that had previously cushioned the market.

This exodus follows a leveraged liquidation event in October, when over $19 billion in open interest was erased in 24 hours, breaking a parabolic rally and creating a new resistance cluster between $98,000 and $102,000.

The broader economic landscape adds to the complexity. Treasury Secretary Scott Bessent recently downplayed recession risks for the U.S. economy despite a $11 billion hit from the government shutdown, emphasizing optimism about 2026 growth driven by easing interest rates and tax cuts. However, challenges persist: factory activity slowed in November, and consumer frustration over inflation-still at 3% annually-remains acute. Bessent attributed inflation disparities to regulatory differences between Democratic and Republican states, a stance aligning with the Trump administration's focus on affordability.

Meanwhile, liquidity in the crypto ecosystem is tightening. Stablecoin market capitalization has shrunk by $4.6 billion since November 1, with net outflows of $800 million in a single week. Centralized exchange volumes have dropped below $25 billion daily, a 40% decline from early October, reducing the market's ability to absorb sell pressure. On-chain data reveals diverging behaviors: mid-tier "whale" wallets are accumulating at discounted levels, while retail traders face heightened volatility risks.

Regulatory clarity may offer a counterbalance. The U.S. Senate plans to vote in December on a crypto market structure bill that would define whether digital assets are securities or commodities, resolving jurisdictional conflicts between the SEC and CFTC. Proponents, including President Trump, argue the bill is critical to positioning the U.S. as the "crypto capital of the world." If passed, it could attract institutional investment by providing a clear compliance framework, though uncertainty remains until the vote.

For crypto traders, the near-term outlook is cautious. The interplay of ETF redemptions, liquidity constraints, and regulatory uncertainty suggests a period of consolidation. However, long-term optimism persists, with some analysts predicting renewed growth in 2026 if macroeconomic conditions stabilize and regulatory clarity materializes.