Bitcoin faces $65K risk as AI losses threaten forced selling, Hilbert CIO says

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Hilbert Group’s Russell Thompson has warned that Bitcoin could fall toward $65,000 if key support breaks, as losses in AI and chip stocks threaten to force investors to sell crypto to meet margin calls.

Summary

Thompson expects Bitcoin selling during deleveraging, followed by a possible return of capital from AI.
Bitcoin support around $71,900 is central to his conditional warning of a decline toward $65,000.
Hilbert’s liquidity models have weakened since Nov. 2, while options pricing favors downside protection.
October’s U.S. CPI report is scheduled for Nov. 10, ahead of December’s Fed decision.

Hilbert Group’s chief investment officer, in comments shared with crypto.news on Nov. 9, said funding concerns surrounding smaller AI and semiconductor companies could bring further losses across investment portfolios. Although he expects some money to return to digital assets eventually, his immediate assessment remains bearish.

“If you start getting margin calls, then you start selling bits of your portfolio that are not particularly core, and that usually means Bitcoin.”

He described “blood in the water” around the AI trade, warning that investment funds exposed to the sector could face further strain.

Bitcoin’s $71,900 support separates two downside scenarios

With Bitcoin trading around $74,200 at the time of his assessment, Thompson identified initial support at $72,800, near the middle of April’s breakout range. Moving average support sits just below, around $72,700, followed by a larger trend line near $71,900.

He expects buyers below the prevailing price, but said losing the trend line would make $65,000 a concern. Although $70,000 is an obvious round-number threshold, he sees little technical support there beyond its psychological appeal.

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Measured against his $74,200 reference price, a move to $71,900 would represent a decline of approximately 3.1%. Reaching $65,000 would mean a 12.4% drop.

His caution follows a recovery that failed to hold last week. Bitcoin climbed above $80,000 on Nov. 5, when the previous session’s $74.6 million in U.S. spot ETF inflows and heavy short liquidations supported buying.

By Nov. 6, it was back near $76,000 after technology-stock losses and $430.2 million in ETF withdrawals during Thursday’s session.

AI capital could return after forced selling passes

Thompson traces Bitcoin’s earlier peak to investors moving money out of crypto and into chips, AI and technology stocks. With those trades now losing capital, he believes digital assets could eventually receive some of the money coming out.

His expectation depends on the current deleveraging ending and financial markets settling. He has not ruled out a Bitcoin breakout before year-end, even as he expects difficult trading in the immediate period.

“Once this period of deleveraging passes and markets calm down, I think some of that capital is likely to flow back.”

The inflation backdrop forms part of his argument for renewed crypto investment, although he still expects forced portfolio selling to weigh on Bitcoin before that potential recovery.

Institutional flows have remained weak. He estimated Bitcoin ETF withdrawals at $1.2 billion last week. Separately, the Nov. 8 weekly market coverage recorded $1.28 billion in withdrawals for Nov. 2–6, citing Farside Investors.

Options traders continue paying more for downside protection, according to Thompson. He put five-delta put implied volatility at 51, compared with 38 for at-the-money options, leaving a 13-point premium. Comparable calls carried only a one-point premium.

Hilbert’s five-factor global liquidity model has fallen to 2.61, while its six-factor model stands at 3.02. Thompson describes readings below one as crisis liquidity and readings above nine as abundant liquidity.

The firm’s Nov. 2 update had put those models at 3.23 and 3.27, respectively. The latest readings are lower by 0.62 and 0.25 points.

CPI arrives as Thompson sees December hike risk

On monetary policy, Thompson said stronger U.S. employment and wage data had pushed the December Fed meeting into play. He cited market pricing of a 77% probability of a rate hike and said two hikes between now and next year were the favored outcome.

Yet he sees a counterweight in inflation expectations, which he described as well anchored, alongside lower breakeven rates. In his assessment, expectations about future inflation could restrain the Fed even when recent economic releases look strong.

The Bureau of Labor Statistics has scheduled October CPI for Tuesday, Nov. 10, at 8:30 a.m. Eastern Time.

September’s official inflation data showed headline consumer prices rising 0.6% month over month and 3.7% annually. Excluding food and energy, prices rose 0.3% during the month and 2.6% over the year.

Read more: Strategy buys 1,036 Bitcoin, repurchases $188M in STRC

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