Bitcoin loses $73,000 level amid unexpected US inflation

Inflation shock in the US shifts market sentiment

The cryptocurrency market has suffered a new blow, caused not by internal sector issues but by macroeconomic indicators in the United States. Inflation data published on 10 November came in higher than analysts had forecast. US consumer prices rose by 0.4% in October, compared to the expected 0.3%, while core inflation stood at 0.3% instead of the predicted 0.2%.

These figures significantly impacted market instruments. On the Polymarket platform, the probability of a Federal Reserve rate hike in December reached 85%. The yield on 10-year US Treasury bonds increased from 4.86% to 4.98% in a single day.

The link between expensive money and the tech sector

The market is now questioning the Federal Reserve's ability to maintain a soft monetary policy. If inflationary pressure does not ease, interest rates will have to be kept high or even raised further. This creates a chain reaction: expensive credit pressures the artificial intelligence sector, which in turn affects the Nasdaq index.

For instance, Nvidia shares fell by 5.5% on Tuesday. Investors began reducing risk: $969 million was withdrawn from spot Bitcoin ETFs over five days. This led to a further decline in Bitcoin's price, which dropped to $72,727 on the Binance exchange, losing the $75,000 and $73,000 levels.

Confirmation of a previously discussed scenario

Experts note that a similar scenario was considered as early as a month ago. At that time, analysts pointed to a complex of factors: the November elections, issues in the AI sphere, high interest rates, geopolitical risks, and potential difficulties in the crypto sector. Specific dates for a potential drop were named: the end of October and the period immediately after the elections, 3–5 November. The market decline began on 5 November.

It is worth noting that despite certain positive news, such as Donald Trump's statements about moving towards ending the conflict with Iran and negotiations between Russia and Ukraine in Abu Dhabi, which started on 10 November, these factors did not save the markets from a correction. Brent crude oil is also falling, dropping below $90, which is a minimum since late August.

Financial risks in the artificial intelligence sector

An additional pressure factor is global problems in the AI sector, which is a key driver of the US economy. Banks are beginning to write off AI-related loans. For example, ING has a portfolio of $500 million in this area. And when money does not come in, the market begins to crumble.

Analysts emphasise that positive news is unable to save a market built on the basis of cheap money. Regarding where this wave of decline will end, experts have opinions and even a specific date.