ETF Weekly Outflows Hit 1.3 Billion, December Rate Hike Expected as Bitcoin Faces Crucial Test at $73,000

Ku Li, TechFlow

TechFlow Guide:

On Sunday, Nov. 8, Nvidia's board announced an independent investigation into Jensen Huang, causing Nasdaq futures to swing dramatically within minutes. Bitcoin followed, dropping to around $73,500, its lowest since Aug. 21. The midterm elections held a week earlier had already seen Bitcoin and the Nasdaq fall 5.5% on the same day, with spot ETFs recording $1.28 billion in outflows last week. The CPI figure released Tuesday will be the last inflation data before December's policy meeting, and the 21-week moving average near $73,000 lies just below.

On Sunday, Nov. 8, Nvidia issued a statement saying that, following reports that Jensen Huang was targeted by foreign intelligence operations, an independent investigation would be launched by a committee of independent directors and outside counsel. Later that same day, Huang acknowledged having an extramarital affair in an email to employees, stating he would fully cooperate with the investigation.

The woman named in the report is Alice Huang, a former executive at Nvidia chip customer MegaSpeed. Last month, The New York Times reported that U.S. intelligence agencies believe she may have been passing information to Beijing. The board stated there is no reason to believe U.S. national security or company secrets have been compromised, and China's Ministry of Foreign Affairs denied the espionage allegations on Monday.

After the news broke, Nasdaq 100 futures fell then rebounded. According to statistics from The Kobeissi Letter, approximately $250 billion in market cap evaporated within seven minutes before rebounding by roughly $300 billion. Before Monday's U.S. stock market open, Nasdaq futures turned lower again, with Nvidia down nearly 5% in premarket trading.

Bitcoin moved almost in sync. Before the Sunday weekly close, BTC dropped to around $73,500, a low not seen since Aug. 21, before briefly reclaiming $75,000. According to CoinGlass data, over a 24-hour period ending at 9:00 UTC on Monday, approximately $1.12 billion in leveraged positions across the network were liquidated. BTC traded at $74,120 on Monday, down 2.32% over 24 hours.

First Full Trading Day After Election, Bitcoin and Nasdaq Both Fall 5.5%

A private matter involving a chip company's CEO can sway Bitcoin because the two have become intertwined over the past week. On Nov. 3, during the U.S. midterm elections, Democrats took control of both the Senate and House of Representatives. Many winners pledged to restrict AI data centers, citing electricity costs and water usage. Texas holds the largest data center market in the country, and its newly elected governor campaigned on halting new construction.

The market was still rebounding on Nov. 4, with Bitcoin back up to $81,000. The mood shifted the next day: the NASDAQ Composite fell 5.5%, the PHLY Semiconductor Index dropped over 12%, and Nvidia declined 9.26%. AMD, despite just reporting earnings that beat expectations, saw its stock fall 17% as well. Bitcoin fell from around $80,300 to close at $76,000 that day, also dropping approximately 5.5%.

Companies with mining backgrounds were also sold off. IREN and Applied Digital, which built their businesses around Bitcoin mining and now build server farms and rent computing power for AI clients, both fell more than 14% that day. In their financial statements, AI and cryptocurrency have long been the same business.

Panic spread to Seoul the following day. On Nov. 6, South Korea's KOSPI opened down 8.55%, triggering a 20-minute circuit breaker halt. Samsung Electronics and SK Hynix supply high-bandwidth memory to Nvidia, and combined they account for about half of the index's market capitalization.

$1.28 Billion in Spot ETF Outflows for the Week, with BlackRock Accounting for 95%

Stocks are falling, and institutional capital is pulling out. According to SoSoValue data, U.S. spot Bitcoin ETFs saw net outflows of $1.28 billion from Nov. 2 to 6, marking the largest single-week outflow since late June. BlackRock's IBIT accounted for roughly $1.21 billion in outflows, or about 95%. Among the five trading days, only Nov. 4 saw net inflows, coinciding with the market's rebound.

This week flipped the script for the ETF's year-to-date performance. One week ago, spot Bitcoin ETFs still had year-to-date net inflows of approximately $450 million; now they stand at net outflows of $800 million to $900 million, marking the first reversal to negative territory since turning positive in late September.

Chaos also hit the crypto community itself. On Oct. 29, approximately $6.3 billion was stolen from Binance's hot wallet over a roughly 20-minute window, representing the largest recorded crypto hack—about four times the size of the Bybit breach. Both TRM Labs and Chainalysis attribute the attack to the North Korean hacking group TraderTraitor. Binance has vowed to fully compensate users, and approximately $3 billion has already been frozen on-chain.

Beyond the frozen assets, another massive chunk remains. According to estimates from Elliptic, attackers still hold approximately $3.3 billion in untraceable/unfreezable assets, including 18,270 BTC. Once these coins are broken up and sold, they will represent immediate selling pressure.

September CPI Rises to 3.7%, Markets Bet on December Rate Hike

The most crucial number this week comes on Tuesday. U.S. October CPI is scheduled for release at 8:30 AM ET Tuesday, with PPI following on Friday.

The Federal Reserve is currently debating whether to raise interest rates. It hiked for the first time in three years in September, held steady in October, leaving the target range at 3.75% to 4.00%. September CPI rose 3.7% year-over-year, 0.3 percentage points higher than August, with over half of the monthly increase driven by gasoline prices. October non-farm payroll added 165,000 jobs, well above the expected 65,000. According to CME FedWatch, the probability of a 25-basis-point rate hike at the December policy meeting stands at 78.8%.

Economists broadly expect October CPI to rise around 0.3% month-over-month. Based on scenario models from several institutions, if the figure comes in above expectations, the probability of a December rate hike could surge past 85%; if core CPI month-over-month is only 0.2% or lower, the probability could dip below 70%. Later that same day after U.S. stock market close, AI cloud provider CoreWeave will release its third-quarter earnings report. On Tuesday, Bitcoin must navigate hurdles related to both inflation and AI.

Oil prices present another thread. WTI crude traded near $90 per barrel on Monday. Trump told CNN that the likelihood of the U.S. striking Iran again is very low. When asked if oil prices could drop to $75, economist Robin Brooks replied, "Of course," noting that a decline in oil prices would simultaneously lift Bitcoin, equities, and precious metals.

21-Week Moving Average at $73,078, IBIT Sees Six Consecutive Days of Outflows

Technically, Bitcoin has broken below the 50-week moving average at $75,492 and is approaching the 21-week moving average at $73,078. The short-term holder cost calculated by CryptoQuant sits at $75,691, meaning funds that entered over recent months are overall underwater. Coins traded one to three months ago carry a cost basis of around $79,300, where rebounds would encounter sell pressure from investors looking to break even.

Viewing these lines together, the forces weighing on Bitcoin largely originate from outside the crypto ecosystem.

Nvidia's governance turmoil, Democrats' stance on data centers, and the Fed's rate hike expectations are none of things resolvable on-chain. The Binance hack is the only internal factor, which the market took over a week to absorb. Over this period, Bitcoin's price action closely mirrors a typical AI-concept stock, falling in tandem with the Nasdaq as ETF capital follows the broader stock market flows.

If Tuesday's CPI data adds fuel to rate hike concerns, the 73k dollar mark will serve as the first test. Institutional sentiment is already reflected in the capital flows: since Oct. 30, IBIT has recorded six consecutive days of net outflows totaling approximately $1.44 billion.