Bitcoin falls below $90,000. What’s behind the plunging price?

Bitcoin’s price collapsed below $90,000 on Tuesday morning, extending a month-long market rout that has erased more than $1.2 trillion from cryptocurrency markets and left investors in uncharted waters.

The top crypto is now down nearly 30% from its $126,000 all-time high set on October 6. Bitcoin exchange-traded funds are seeing relentless selling, with another $220 million in redemptions on Monday according to DefiLlama data, bringing the total outflow to over $2.5 billion so far in November.

“This is about macro, mechanics, and profit-taking,” Maja Vujinovic, CEO of digital assets at crypto treasury firm FG Nexus, told DL News. “Tech and growth sold off sharply last week, and Bitcoin is still traded like a high-beta tech asset by institutions.”

The selloff comes as the macroeconomic picture takes a darker turn. The aftermath of the 43-day US government shutdown has crippled key data releases and hammered Federal Reserve rate-cut odds for December.

“Large allocators are trimming positions after Bitcoin’s big [yearly] move, and some are harvesting tax losses elsewhere while reducing crypto exposure,” Vujinovic said.

Macro and markets

Investors are still grappling with the thick fog left by the government shutdown, including delayed economic indicators and distorted datasets.

“Markets are increasingly pricing in the downside risk of a December pause in Federal Reserve rate cuts, reflecting caution in the absence of key data,” Gabriel Selby, head of research at CF Benchmarks, told DL News earlier this week.

US and global stock markets are also flashing warning signs. The S&P 500 closed in the red again yesterday.

Market watches are now fixated on Nvidia’s earnings report on Wednesday and Thursday’s long-delayed September jobs report.

Federal Reserve Vice Chair Philip Jefferson added to market unease on Monday, saying he sees “increased downside risks to employment” and stressed policymakers must “proceed slowly” as rates approach neutral, Bloomberg reported.

That uncertainty has hammered rate-cut expectations.

The CME FedWatch tool now gives December cuts roughly 48% odds. On Polymarket, bettors place the odds at 45%.