Bitcoin traded near $69,800 on Friday morning after briefly crashing to roughly $67,555 around midnight Eastern time, its lowest level since mid-August, according to Bitcoin Magazine Pro data. The rebound held after October producer prices rose by less than economists had anticipated, though the U.S. dollar remained near a 19-month high and traders continued to fully price in a December Federal Reserve rate hike.

The asset was changing hands near $72,800 at the same point on Thursday. It drifted toward $71,000 by Thursday evening, then gave way late at night, breaking below $70,000 and sliding to that midnight low. The decline also pushed bitcoin beneath its 200-week moving average, a long-term trend line sitting near $68,000 that reflects the average of the past 200 weekly closes and is widely watched as a gauge of long-term trend strength. Buyers lifted the price back above $69,000 before sunrise, and the recovery extended toward $69,800 once the producer-price report crossed the wires.

A Stronger Dollar and Higher Yields Weigh on Bitcoin

The U.S. Dollar Index, which measures the dollar against a basket of major foreign currencies, held above 103 on Friday after a three-day rally carried it to its highest level since April 2025. The 10-year Treasury yield was near 5.15% ahead of the data, and two-year yields, which track Fed expectations most closely, were on pace for their worst week since 2024, Bloomberg reported.

Per CME FedWatch data, traders still see an 88% chance of a quarter-point hike at the Fed's Dec. 8–9 meeting and a 12% chance of a half-point move. Fed Governor Christopher Waller has added a 50-basis-point increase to the discussion, while New York Fed President John Williams said Thursday that inflation remains high and that policymakers need to take further action.

Higher rates raise the cost of holding an asset that pays no interest, and a stronger dollar tends to drain demand from risk assets. Both forces have weighed on bitcoin since this week's hotter-than-expected consumer price index reading.

Bitcoin has also broken away from tech stocks. It fell 5.9% between Nov. 5 and Nov. 12 while the Nasdaq 100 gained 6.4%, a sign it is trading more on yields and the dollar than on the AI trade. Nasdaq 100 futures rose about 0.6% on Friday after the producer-price report, as investors also weighed Nvidia's announcement that Jensen Huang had resigned as CEO.

Leverage Unwinds and ETF Selling Continue

The break below $70,000 set off a wave of forced selling, as exchanges automatically close leveraged positions whose collateral no longer covers their losses. Roughly $1.64 billion in crypto positions were liquidated over 24 hours, with bets on higher prices accounting for nearly 89% of the total and bitcoin positions making up $916 million of that figure.

U.S. spot bitcoin ETFs, which hold the asset directly on behalf of investors, added to the pressure. The funds posted about $47.7 million in net outflows on Thursday, their sixth consecutive day of withdrawals, bringing the cumulative run to roughly $1.49 billion. BlackRock's iShares Bitcoin Trust (IBIT) alone shed about $2 billion over nine sessions through Wednesday, and the group as a whole has now flipped to approximately $1.56 billion in net outflows for 2026.

Sentiment has soured in step. A widely watched crypto fear and greed gauge dropped to 20 on Friday, near the bottom of its 0-to-100 scale and its lowest reading since July 8, and bitcoin is now on track for a second consecutive down year.

Positioning has turned defensive. Average perpetual futures funding rates turned negative for the first time in a month as the price fell toward $68,500, meaning short sellers are now paying to hold their bets. Order books are thin as well: bitcoin order-book depth across major exchanges fell to $72 million on Nov. 9, roughly 33% below normal levels. "Liquidity remains thin while leverage stays elevated, leaving the market vulnerable to sharp moves in either direction," said Tanay Ved, a senior research associate at Talos.

Producer Prices Rise Less Than Expected

The Labor Department said on Friday that the Producer Price Index for final demand rose 0.3% in October, short of the 0.4% monthly increase economists had expected, after a revised 1.4% advance in September. Core prices, which exclude food and energy, increased 0.3%, matching forecasts. On an unadjusted basis, the headline index was up 6.5% from a year earlier, the largest 12-month rise since November 2022, per the Bureau of Labor Statistics.

The slightly cooler report eased some pressure on the dollar, which nevertheless held above 103, but a December rate hike remains fully priced, leaving limited relief for bitcoin heading into the weekend. The Fed's Dec. 8–9 meeting now stands as the next scheduled checkpoint for rate expectations, while the path of ETF flows and perpetual funding rates offers a running read on whether positioning pressure is building or easing.

At the time of writing, bitcoin trades near $69,800.

This article first appeared on Bitcoin Magazine and was written by Micah Zimmerman.