Bitcoin (BTC) fell below the key $100,000 level this Friday during the Asian trading session. Growing US inflation fears triggered a massive sell-off in global markets. Maja Vujinovic of FG Nexus noted that a combination of macro factors and lower institutional demand is pressuring the market.
The leading cryptocurrency was trading at $99,063, a 2.9% drop. The pessimism was widespread. Ether (ETH) plummeted 6.9% and XRP lost 7.6%. Furthermore, Wall Street futures were trading in the red. The S&P 500 fell 1.66% and the tech-heavy Nasdaq retreated 2.29%. In Asia, Japan’s Nikkei 225 lost 1.77% and Hong Kong’s Hang Seng also opened lower.
Are Inflation and the Fed Putting an End to the Bull Rally?
Market confidence soured significantly. Traders reassessed the Federal Reserve’s monetary policy. Hawkish comments from Fed officials (Hammack and Musalem) reignited US inflation fears. Therefore, the odds of a rate cut in December fell sharply. The CME FedWatch tool shows probabilities dropped from 60% to 46% in a single day.
Bitcoin’s drop erased recent gains. These gains had been fueled by institutional optimism. However, Bitcoin ETF flows have turned negative, with outflows of $963.7 million over the last nine days. Vujinovic highlighted that selling pressure is coming from long-term holders. She also pointed to a clear slowdown in institutional demand.
The macroeconomic situation remains uncertain. The White House warned of delays in unemployment data due to the government shutdown. This reduces investor visibility. For Bitcoin to begin its next upward leg, renewed institutional conviction and improved liquidity will be necessary, beyond just positive headlines.
