Why is Bitcoin down today?

Bitcoin fell below $106,505.22 on November 3, down 3.6% in 24 hours, as a strengthening US dollar and sustained ETF flows pressured crypto across the board. At press time, Bitcoin has lost that key support level, now trading below $104,000 for the first sustained time since June.

ethereum trading at $3,490, down 9%, while Solana decreased by 13% to $159. XRP, Cardan, Dogecoinand BNB each posted double-figure losses.

The DXY dollar index traded at 99.886 at press time, up 0.2% and near a three-month high after a weekly gain of 0.8%.

The strength of the dollar usually weighs on Bitcoin because the crypto functions as an alternative asset with no yield. As the dollar rises, investors shift toward dollar-denominated instruments that offer positive real returns, thereby reducing demand for Bitcoin and other digital assets.

Additionally, traders positioned themselves defensively ahead of this week’s US economic data releases, following the Federal Reserve’s dovish tone in its latest policy statement.

The week features several high-impact reports. ISM manufacturing data is released on November 3rd, and services PMI and ADP employment numbers are released on November 5th.

The week closes on November 7 with the non-farm payrolls report, the most closely watched indicator of the labor market.

University of Michigan consumer sentiment data, also for November 7, round out a heavy data schedule that will inform expectations of Federal Reserve policy and the direction of the dollar.

Adding to the selling pressure, US spot Bitcoin ETFs registered $1.15 billion in cumulative flows from October From October 29 to October 31, second Farside Investors data. This sales pressure increases as November opens.

Those redemptions removed a layer of structural support that had absorbed selling by crypto-native participants during earlier market declines, as ETF flows function as demand stabilizers.

Liquidations of derivatives added to the decrease. CoinGlass show data nearly $1.15 billion in liquidated long positions in the last 24 hours, with about $330 million concentrated in Ethereum futures after ETH fell below the $3,900 threshold.

Liquidations occur when leveraged traders’ positions are automatically closed as prices move against them, creating forced selling that accelerates downward momentum.

The combination of macroeconomic headwinds, the strength of the dollar linked to the hawkishness of the Fed, and the pressures of the market structure from the flows of ETFs and liquidations of derivatives​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ has been created the conditions where selling strengthened in the spot and futures markets.

This week’s US economic data will determine whether the dollar sustains its recent strength. Any reversal in DXY will ease the pressure on Bitcoin and the broader crypto markets.

Until then, the absence of ETF inflows and the overhang from liquidated leveraged positions leave the digital asset vulnerable to continued volatility.