The crypto market is going down today, with Bitcoin and most altcoins being in the red. Bitcoin dropped below the important support level of $75,000. Some of the top laggards in the last 24 hours were tokens like Pi Network, Aster, LayerZero, and Stacks. This article explores some of the top reasons why cryptocurrencies are falling today.
Crypto Market Down as ETF Outflows Rise
The crypto market is falling as outflows from Bitcoin and altcoin ETFs surge. Data shows that spot Bitcoin ETFs recorded $411 million in outflows on Friday, following $430 million a day earlier. As a result, total outflows this month have reached $1.28 billion, more than double the $515 million recorded in October.
Spot Ethereum ETFs have lost over $365 million in assets this month after losing $1.6 billion last month. Solana funds have lost over $26 million in November after losing $143 million in October.
These outflows have accelerated after the US midterm elections, in which Democrats won by a large margin. Data shows that Democrats are on track to win 56 seats in the Senate and over 250 seats.
The victory means that Democrats will start investigating the crypto industry. Senator Elizabeth Warren, who will head the Senate Banking Committee, has long been a critic of the crypto industry.
It also means that the probability that the Senate will not pass the CLARITY Act, which aims to streamline the crypto industry by moving most of the regulatory work from the Securities and Exchange Commission (SEC) to the CFTC.
Rising liquidations and falling Crypto Fear and Greed Index
The crypto market is also falling as liquidations surge. CoinGlass data shows that total liquidations rose 1,947% in the past 24 hours to more than $1.14 billion. Bitcoin positions worth $305 million were liquidated, along with Ethereum positions worth over $497 million and Solana positions worth $41 million. Such liquidations typically add to the selling pressure on the market.
The rising liquidations has coincided with the falling futures open interest. Data shows that open interest dropped by 2.75% in the last 24 hours to $127.8 billion.
All this is happening at a time when the Crypto Fear and Greed Index is falling. Data shows that the index has moved from the greed zone of 81 in September to the fear zone of 27. It is common for cryptocurrencies to drop whenever the gauge has moved to the fear zone.
Crypto Fear and Greed Index | Source: CoinMarketCap
Odds of Fed rate hike are rising
The crypto market is also falling as the odds that the Federal Reserve will hike interest rates rise on Polymarket and other prediction marketplaces. The CME Fed Futures tool has placed the odds of the hike to nearly 80%.
These odds jumped after the US published strong jobs numbers on Friday. The report showed that the economy created 165k jobs, while the unemployment rate dropped to 4.1% last month. With inflation remaining above the 2% target, the Fed has an incentive to hike interest rates, a move that will impact risky assets like crypto.
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