Bitcoin fell sharply in early Wednesday trading (November 5, Dhaka), extending recent weakness as macroeconomic nerves rattled the crypto market. The world’s largest cryptocurrency dropped amid a firmer U.S. dollar and fresh doubts over how soon the Federal Reserve might start cutting interest rates.
Derivatives liquidations and weaker spot-ETF flows added further pressure, with risk appetite across global markets remaining fragile.
Who: Bitcoin investors and global crypto traders
What: A sharp intraday decline in Bitcoin’s price
When: Early Wednesday, November 5, 2025 (Dhaka time)
Where: Global cryptocurrency exchanges
Why: Stronger U.S. dollar, slower rate-cut expectations, leverage unwinds, and soft ETF demand
How: Liquidations in over-leveraged futures positions triggered cascading sell orders, amplifying the drop.
Macro Pressures and Market Mechanics
The immediate catalyst behind today’s Bitcoin drop is the strengthening U.S. dollar and renewed uncertainty about the pace of the Federal Reserve’s rate cuts in 2025.
When the dollar rises, risk assets—including Bitcoin—typically struggle as investors shift toward safer returns.
Additionally, a wave of futures liquidations hit the market after Bitcoin broke key technical levels, forcing leveraged traders to unwind long positions rapidly. This triggered a cascade effect, leading to deeper losses and higher volatility within hours.
Analysts’ Take and Market Reactions
Market strategists point to soft ETF inflows and fragile sentiment as contributing factors.
According to analysts, after strong inflows earlier this year, Bitcoin spot ETFs have seen “choppy” flows, with outflows removing a major source of buying demand on weak days.
Traders say that after October’s heavy deleveraging phase, confidence remains thin. “Markets are quick to sell rallies,” one derivatives analyst noted. “Until macro signals settle, sharp intraday swings are here to stay.”
Impact on Traders and Long-Term Holders
Short-term traders are facing thin liquidity around major price thresholds, leading to exaggerated moves when large liquidation clusters hit.
Long-term holders are instead watching macro indicators—such as the dollar index, upcoming inflation data, and the Fed’s policy guidance—for signs of stability.
Exchanges and market makers are monitoring funding rates and open interest to assess whether the leverage reset has further to run. If dollar strength fades and ETF flows stabilize, Bitcoin could find a base.
What’s Next for Bitcoin
Investors will closely watch next week’s U.S. inflation print and any comments from Federal Reserve officials regarding rate trajectories.
Analysts suggest Bitcoin could stabilize if the dollar rally eases and ETF inflows resume.
Until then, the near-term outlook remains volatile, with traders bracing for potential tests of key support levels.
Sources
Bloomberg Crypto
CoinDesk Markets
Reuters Financial News
The Wall Street Journal (Markets Section)
On-chain analytics from Glassnode
