BTC plummeted 17% in two days, falling below 63,000 USD: a sell-off orchestrated by Washington, the Federal Reserve, and the Treasury Department

Author: Hu Tao, ChainCatcher

On November 15, Bitcoin's price fell to $62,199, a 24-hour decline of 8.9%, and a cumulative drop of 16.3% over the week.

This is the lowest price for Bitcoin since July 2026, retreating more than 50% from its historical high.

Panic is spreading across the market: the Crypto Fear and Greed Index has dropped to 17, entering the "Extreme Fear" zone; over the past 24 hours, the total liquidation amount across the network exceeded $1 billion, with nearly 90% from long positions; the total market capitalization has shrunk from nearly $3 trillion at the October peak to $2.3 trillion.

However, this round of decline cannot be explained by a single catalyst—it is the result of a quadruple pressure resonating simultaneously within the same time window. The significant drop in AI stocks has become an important transmission line throughout these pressures.

First Pressure: Political Changes

On November 4, the results of the U.S. midterm elections were announced, with the Democratic Party sweeping both the House and Senate. On the same day the news was confirmed, Bitcoin briefly fell below $76,000.

The core concern of the market is that the probability of the previously regarded "sure thing" CLARITY Act (the Crypto Market Structure Bill) passing has plummeted. The Democratic Party has historically advocated for stricter anti-money laundering and risk management regulations, and the shift in policy expectations directly removed an important cornerstone that had supported crypto valuations over the past two years.

However, the impact of political changes is not limited to crypto regulation. The market has also begun to reassess the policy risks faced by AI data centers regarding environmental assessments, power consumption, and safety regulations, worrying about rising construction costs and extended approval timelines. Thus, the same election results weakened the policy expectations for the crypto industry while shaking the narrative of continuous high-speed expansion in AI capital expenditure, ultimately evolving into a cross-market reassessment of risk assets.

Second Pressure: The Fed's Hawkish Turn

If politics is a slow variable, macroeconomics is the trigger. Data released in mid-November showed that U.S. inflation rose 0.4% month-on-month in October, higher than the expected 0.3%; non-farm employment increased by 165,000 that month, nearly 2.5 times the market expectation of about 65,000.

Federal Reserve Governor Christopher Waller subsequently stated that he predicts the Fed will raise interest rates by 50 basis points. CME FedWatch data shows that the market pricing for a 25 basis point rate hike in December has reached 88.5%, with pricing for a larger hike at 11.5%.

Note that this is not a "slowing of the rate cut pace," but a directional reversal—from expecting rate cuts to repricing for rate hikes. Rising interest rates directly increase the holding costs of leveraged funds, significantly reducing the relative attractiveness of zero-yield risk assets like Bitcoin.

The same interest rate transmission chain is also suppressing AI stocks: the valuations of AI companies are highly dependent on future growth, while data centers, chips, and power infrastructure require continuous massive capital investment. When discount rates and financing costs rise simultaneously, the market will naturally scrutinize more harshly when AI investments can translate into profits and cash flow.

Therefore, AI stocks and Bitcoin are not two unrelated markets; they are both facing the same question: In a high-interest-rate environment, how much should assets relying on future narratives and liquidity support be worth?

Third Pressure: Institutional Funds Continually Bleeding

ETFs were the most important buying engine in the last bull market, but they are now turning into net sellers. Farside Investors data shows that from November 9 to 13, during five trading days, the U.S. spot Bitcoin ETF saw a net outflow of about $1.07 billion, while Ethereum ETFs lost about $399 million during the same period; BlackRock's IBIT has faced net outflows for 11 consecutive trading days.

Deeper signals come from stablecoins. Coinbase Institutional data shows that the combined circulating supply of the three major stablecoins—USDT, USDC, and DAI—has shrunk by $11.5 billion over the past 30 days, setting a historical record.
Stablecoins are the on-chain ammunition depot, and a shrinking depot means that off-chain funds willing to buy the dip are also retreating simultaneously.

Fourth Pressure: The Backlash of the Treasury Flywheel

The most industry-significant change comes from the "Bitcoin Treasury Companies" (DAT) group—once market stabilizers, they are now becoming marginal sellers. On-chain monitoring in November shows that the listed mining company MARA sold 13,597 Bitcoins (cash out of about $1.1 billion) over the past six weeks and has explicitly stated it will continue to sell; Ethereum treasury company BTCS is selling ETH at a discount to maintain the health of its $64 million loan on Aave (liquidation line at $1,717, current ETH price at $1,890, only about 10% away from triggering); Nakamoto was forced to extend a $165 million Kraken loan for a year; Hyperscale Data simply liquidated its last batch of Bitcoins, completely abandoning its treasury plan.

This stands in stark contrast to the environment in 2025, where "new companies announced Bitcoin purchases every week." The situation for Strategy makes this backlash even more dramatic: just a week before the crash, MSCI announced it would remove it from the global standard index (effective November 30), leaving the expectation of a cut-off from passive fund pipelines hanging; its average holding cost of $75,456 is already above the current market price.
The business model of treasury companies essentially relies on "using the premium of equity markets to finance Bitcoin purchases." When stock prices fall below net asset value, equity financing windows narrow, and passive funds withdraw simultaneously, this flywheel switches from positive feedback to negative feedback—while they may not necessarily sell Bitcoin, the market has already begun to price in "they might sell Bitcoin."

Differences from Previous Crashes

From an on-chain structural perspective, this decline shares similarities with the liquidation wave on October 10, 2025 (both are concentrated liquidations of leveraged long positions), but the background is entirely different. Glassnode data shows that Bitcoin has fallen below the average cost line of short-term holders (STH) at about $75,700, meaning that the vast majority of buyers over the past year are currently in a state of unrealized losses.

At the same time, the correlation between Bitcoin and high-growth tech stocks in the Nasdaq has significantly increased—the Nasdaq entered a technical correction zone in early November (down more than 10% from its peak), and the market's doubts about the return on AI capital expenditures are being transmitted to the crypto market through "risk asset resonance."

This brings a pessimistic inference: as long as the Fed's rate hike in December is realized and the tech sector of the U.S. stock market continues to adjust, external pressures on the crypto market will be hard to alleviate; while the fear index at 17 has entered a historical extreme zone, "extreme fear" itself has never been a bottom signal—experience from 2022 shows that extreme emotions can persist for months.

The next verification points worth watching are three: the interest rate decision and actual magnitude (25 basis points or 50 basis points) from the December FOMC meeting; whether the weekly flow of spot ETFs can stop the bleeding; and whether the $60,000 round number can withstand the impact of liquidation below the institutional cost line.

Another point of interest is whether the sell-off of AI stocks—especially Nvidia and the semiconductor sector—shows signs of exhaustion, and whether the correlation between BTC and the Nasdaq begins to retreat from its high of 0.68. If the first three continue to deteriorate while the deleveraging on the AI side accelerates, the definition of this round of "correction" may need to be rewritten.