Bitcoin fell below $106,505.22 on November 3, down 3.6% in 24 hours, as a strong US dollar and sustained ETF outflows put pressure on cryptocurrencies overall. At the time of writing, Bitcoin has lost a key support level and is trading below $104,000 for the first time since June.
Ethereum fell 9% to trade at $3,490, while Solana fell 13% to $159. XRP, Cardano, Dogecoin, and BNB each recorded double-digit losses.
The DXY Dollar Index was trading at 99.886 at press time, up 0.2% and near a three-month high following a weekly gain of 0.8%.
A strong dollar typically weighs on Bitcoin, as cryptocurrencies act as non-yielding alternative assets. As the dollar strengthens, investors shift to dollar-denominated products that offer positive real yields, thereby reducing demand for Bitcoin and other digital assets.
Additionally, the hawkish tone of the Federal Reserve's latest policy statement has traders on the defensive ahead of this week's release of U.S. economic data.
This week includes some high-impact reports. ISM manufacturing statistics will be released on November 3rd, while services PMI and ADP payrolls will be released on November 5th.
The week ends on November 7th with the release of non-farm payrolls, the most closely watched labor market indicator.
The University of Michigan's Consumer Sentiment Statistics will also be released on November 7th, rounding out a heavy schedule of data informing Federal Reserve policy expectations and the direction of the dollar.
Adding to the selling pressure was the US Bitcoin Spot ETF, which has recorded cumulative outflows of $1.15 billion since October. From Oct. 29 to Oct. 31, according to data from Farside Investors. This led to increased selling pressure as November began.
With ETF flows acting as a demand stabilizer, these redemptions removed a layer of structural support that had absorbed selling from crypto-native participants during the initial market decline.
Liquidation of derivatives added to the decline. According to data from CoinGlass, about $1.15 billion of long positions were liquidated in the past 24 hours, with about $330 million concentrated in Ethereum futures after ETH fell below the $3,900 threshold.
A liquidation occurs when a leveraged trader's position is automatically closed against the price, creating a forced sell and accelerating downward momentum.
The combination of macroeconomic headwinds, a strong dollar due to the Fed's hawkish stance, and structural market pressures from ETF outflows and derivatives liquidations has created a situation of strong selling across spot and futures markets.
U.S. economic data released this week will determine whether the dollar can maintain its recent strength. A reversal in DXY would ease pressure on Bitcoin and the broader crypto market.
Until then, the lack of ETF inflows and overhang from liquidated leveraged positions will leave digital assets vulnerable to continued volatility.
