Weekly ETF Outflows Hit 1.3 Billion, December May See Another Rate Hike as Bitcoin's $73,000 Defense Line Faces Major Test

Curry, TechFlow

TechFlow Summary:

On Sunday, November 8, NVIDIA's board of directors announced an independent investigation into Jensen Huang, causing Nasdaq futures to swing wildly within minutes. Bitcoin followed suit, dropping to around $73,500, its lowest since August 21. The midterm elections one week prior had already seen both Bitcoin and the Nasdaq fall by 5.5% on the same day, while spot ETFs experienced outflows of $1.28 billion last week. The CPI released on Tuesday is the final inflation data before the December interest rate meeting, with the 21-week moving average sitting just below at around $73,000.

On Sunday, November 8, NVIDIA's board issued a statement saying that in light of reports that Jensen Huang had become the target of foreign intelligence operations, a committee of independent directors would be formed and external counsel hired to conduct an independent investigation. Later that day, Huang admitted in an email to employees that he had had an extramarital affair, stating he would fully cooperate with the investigation.

The woman mentioned in the reports is Alice Huang, a former executive at chipmaker MegaSpeed, which does business with NVIDIA. Last month, The New York Times reported that U.S. intelligence agencies believed she may have been passing information to Beijing. The board stated there was no reason to believe U.S. national security or company secrets were compromised, and China's Ministry of Foreign Affairs denied the espionage allegations on Monday.

Following the news, Nasdaq 100 futures initially fell before rebounding. According to The Kobeissi Letter, market cap fluctuated by approximately $250 billion lost and then $300 billion regained within a span of seven minutes. Before U.S. stock markets opened on Monday, Nasdaq futures turned lower again, and NVIDIA shares dropped nearly 5% in pre-market trading.

Bitcoin moved in near lockstep. Before the Sunday weekly close, BTC dipped to around $73,500, its lowest point since August 21, before briefly reclaiming the $75,000 level. According to CoinGlass data, over the 24-hour period ending at 9:00 UTC on Monday, approximately $1.12 billion in leveraged positions across the network were liquidated. On Monday, BTC traded at $74,120, down 2.32% over 24 hours.

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

A chip company CEO's personal affairs could move Bitcoin because the two have been intertwined over the past week. Following the U.S. midterm elections on November 3, Democrats secured control of both the Senate and the House. Many elected officials pledged to restrict AI data centers due to concerns over electricity prices and water usage. Texas holds the nation's largest data center market, and the newly elected governor campaigned on halting new constructions.

On November 4, markets were still rebounding, pushing Bitcoin back up to $81,000. The tide turned the next day as the Nasdaq Composite Index fell 5.5%, the Philadelphia Semiconductor Index dropped over 12%, and NVIDIA declined 9.26%. Despite AMD reporting better-than-expected earnings, its stock still plunged 17%. Bitcoin fell from around $80,300 earlier that day to close at $76,000, marking a similar drop of roughly 5.5%.

Companies originating from mining operations were also sold off en masse. IREN and Applied Digital, which started with Bitcoin mining, now build server rooms for AI clients and lease computing power; both stocks fell more than 14% that day. In their financial statements, AI and cryptocurrency have long operated as the same business.

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

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

As stock markets fell, institutional capital also withdrew. According to SoSoValue data, U.S. spot Bitcoin ETFs saw net outflows of $1.28 billion from November 2 to 6, marking the largest single-week outflow since late June. BlackRock's IBIT accounted for roughly $1.21 billion, or about 95% of the total. Among the five trading days, only November 4 saw net inflows, coinciding with the stock market rally.

This week flipped the book on year-to-date ETF performance. Just a week ago, spot Bitcoin ETFs had recorded net inflows of approximately $450 million for the year; today, that figure has shifted to net outflows between $800 million and $900 million, marking the first negative reading since late September when inflows resumed.

Turmoil also rocked the crypto industry. On October 29, Binance's hot wallet was drained of approximately $6.3 billion in roughly 20 minutes, making it the largest recorded crypto theft, about four times the size of the Bybit hack. Both TRM Labs and Chainalysis attributed the attack to North Korean hacker group TraderTraitor. Binance vowed to cover losses in full, with around $3 billion already frozen on-chain.

Beyond what was frozen, a substantial portion remains untraced. Elliptic estimates that attackers still hold around $3.3 billion in 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 critical number of the week lands on Tuesday. The U.S. October CPI is scheduled for release at 8:30 AM ET on Tuesday, with PPI data coming on Friday.

The Federal Reserve is currently debating whether to raise interest rates. It hiked rates for the first time in three years in September, held steady in October, and kept the benchmark range at 3.75% to 4.00%. September CPI rose 3.7% year-over-year, up 0.3 percentage points from August, with over half of the monthly increase driven by gasoline. October nonfarm payrolls added 165,000 jobs versus an 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. Scenario analyses from several firms indicate that if the figure beats expectations, the probability of a December rate hike could surge past 85%; conversely, if core CPI rises only 0.2% or less, the probability could fall below 70%. Later that same day after U.S. markets closed, AI cloud provider CoreWeave released its Q3 earnings report. On Tuesday, Bitcoin must navigate both inflation and AI gauntlets.

Oil prices form another thread. On Monday, WTI crude hovered around $90 per barrel, and Trump told CNN that the likelihood of the U.S. striking Iran again is low. When asked if oil prices could fall 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 Sits at $73,078, IBIT Sees Six Consecutive Days of Outflows

Technically, Bitcoin has fallen below the 50-week moving average at $75,492 and is approaching the 21-week moving average at $73,078. CryptoQuant calculates the cost basis for short-term holders at $75,691, meaning capital that entered in recent months is largely underwater. Coins changed hands one to three months ago at an average cost of around $79,300, so any bounce to that level would face heavy relief-selling pressure.

Viewing these lines together, most of the downward pressure on Bitcoin originates from outside the crypto ecosystem.

NVIDIA's governance turbulence, the Democratic Party's stance on data centers, and Fed rate hike expectations are issues none can be resolved via blockchain. The Binance hack remains the only intra-industry factor, though markets took over a week to absorb it. Lately, Bitcoin's price action resembles that of a speculative AI stock to some extent: it mirrors Nasdaq declines dollar-for-dollar, and ETF flows ride along with equity market sentiment.

If Tuesday's CPI data further fuels rate hike hopes, the $73,000 level could be the first major test. Institutional sentiment is already reflected in capital flows: from October 30 onward, IBIT has recorded net outflows for six consecutive trading days, totaling approximately $1.44 billion.