Bitcoin Price Forecast: Rising derivatives leverage leaves BTC exposed to sharp moves

• Following Tuesday’s strong US inflation figures, Bitcoin touched a low of $72,727 before trading around $73,800 on Wednesday.
• Withdrawals from US-listed BTC spot ETFs reached $95 million on Tuesday, extending the run of outflows to a fourth consecutive day.
• Heavy leverage in BTC’s derivatives market raises the risk of a sharp move in either direction, reports indicate.

Stronger US inflation figures on Tuesday sent Bitcoin (BTC) down to $72,727, with the cryptocurrency remaining subdued around $73,800 on Wednesday. A further weakening in institutional demand saw BTC spot exchange-traded funds (ETFs) register withdrawals of $95 million on Tuesday, their fourth consecutive day of outflows. A K33 Research report also points to a growing risk of sharp BTC price swings as derivatives-market leverage accumulates, calling for caution among traders.

Bitcoin comes under pressure as stronger inflation lifts yields and the US Dollar

Tuesday’s closely watched US Consumer Price Index (CPI) release showed headline inflation rising 0.4% in October, exceeding the market forecast of 0.3%. Excluding volatile food and energy prices, core CPI increased 0.3%. That matched September’s rise but was above the expected 0.2%. 

Annual inflation readings were absent from the release because monthly data for October 2025 were unavailable following the government shutdown from 1 October 2025 to 12 November 2025.

Risk appetite is being dampened by the above-forecast US CPI readings. At the same time, mounting expectations of additional monetary tightening by the Federal Reserve (Fed) are lending support to the US Dollar (USD) and US Treasuries. 

Concerns over a potential December interest-rate increase by the Federal Reserve (Fed) have intensified following Tuesday’s inflation release. According to Fed Governor Christopher Waller, the stronger-than-expected 0.3% core CPI reading could lead him to consider a larger increase of 50 basis points (bps) at the 8–9 December policy meeting. He warned that opting for only 25 bps could jeopardise the Fed’s credibility.

Keeping policy restrictive remains necessary to bring inflation back to 2%, Philadelphia Fed President Anna Paulson said. Dallas Fed President Lorie Logan, meanwhile, suggested that interest rates may have to rise more quickly than previously envisaged. 

With the 10-year Treasury yield climbing above 5%, this hawkish policy stance is lifting both yields and the USD, putting pressure on risk assets including Bitcoin.

Crypto market sees a wave of liquidations

Following the above-forecast US CPI release, BTC fell sharply on Tuesday to $72,727, its lowest level since 20 August. The CoinGlass liquidation chart below illustrates the move.

Liquidations spread across the cryptocurrency market as prices dropped, predominantly wiping out leveraged long positions and underscoring the extent of bullish positioning.

Further sharp swings remain a significant risk for the leading cryptocurrency, with leverage still accumulating in derivatives markets.

BTC perpetual futures open interest (OI) totals 353,000 BTC, according to K33 Research, placing it in the 99th percentile of readings over the last two years. Over the past week, annualised funding rates have averaged 8.4%. This points to continued demand for long positions as BTC approaches key support levels.

The analyst concluded: “Historically, similarly elevated open interest has coincided with price extremes and periods of substantial volatility, often preceding sharp reversals. While elevated leverage provided fuel for upside moves in June and August, current positioning appears less directional, leaving considerable scope for volatility in either direction. A breakdown could trigger substantial long liquidations, while a recovery could fuel short covering, amplifying price moves as leveraged positions unwind,”

ETF withdrawals extend their run

Net withdrawals from BTC spot ETFs amounted to $95 million on Tuesday, SoSoValue data show, taking the run of outflows that began last week to four consecutive days. The figures reflect a further weakening of institutional appetite for Bitcoin so far this week. Should withdrawals persist and gather pace through the remainder of the week, BTC could face additional pressure and a deeper price correction.

Diplomatic developments offer some grounds for optimism

Developments on the diplomatic front could lend BTC some short-term support. Following Tuesday’s meeting of G7 foreign ministers in Paris, US Secretary of State Marco Rubio said the economic campaign against Iran had inflicted sufficient damage that major combat operations were not currently needed.

US President Donald Trump also sought to ease fears of escalation after the midterm elections. He told reporters that fresh US strikes on Iran were "highly unlikely", pointing to positive momentum in negotiations aimed at ending the Middle East conflict. Iran, meanwhile, called on the US to satisfy its demands under a plan to reopen the Strait of Hormuz.

These developments encourage hopes of a diplomatic breakthrough that could end the US-Iran war. By easing concerns over geopolitical risks, they could provide Bitcoin with support in the near term.

Bitcoin technical outlook: Rallies look vulnerable to selling pressure

At the time of writing on Wednesday, Bitcoin stands at $73,789, with its bearish correction continuing. The price remains beneath the 50-day, 100-day and 200-day exponential moving averages (EMAs), which are grouped between roughly $76,400 and $78,900.

The technical picture points to selling into rallies. On the daily chart, the Relative Strength Index (RSI) sits near 33, just above oversold territory, while the Moving Average Convergence Divergence (MACD) histogram stays below zero. Together, these indicators underline continued downward pressure despite stretched conditions over the short term.

The first upside hurdle is the 200-day EMA at around $76,409. Beyond that lie the 100-day EMA near $77,481 and the 50-day EMA around $78,895. This tightly packed supply zone would need to be regained by bulls to temper the bearish bias. Further up, horizontal resistance around $85,000 presents a more substantial obstacle: a daily close above it would be needed to indicate a more lasting return to a positive medium-term trend.

With no nearby support identified on the chart, a breach of current levels would point BTC towards the psychological support area around $70,000 before it stabilises.

(The technical analysis of this story was written with the help of an AI tool. Know more.)