Bitcoin News Today: Bitcoin's Plunge Driven by Macro Fears and Fading Fed Rate Hopes

Bitcoin Falls Below $94,000, Erasing Earlier Gains After US Stock Market Open

Bitcoin fell below $94,000 on Friday, nearly wiping out its year-to-date gains and marking its lowest level in six months as a broad selloff in risk assets intensified. The cryptocurrency, which hit an all-time high of $126,251 in early October, has lost nearly 25% of its value since then. The decline accelerated amid a four-day rout driven by macroeconomic uncertainty, fading hopes for a Federal Reserve rate cut, and surging liquidations in leveraged positions.

The selloff coincided with steep outflows from Bitcoin spot exchange-traded funds (ETFs), which recorded $870 million in net redemptions on Thursday - the second-largest single-day withdrawal since their launch. Grayscale's GBTC led the exodus with $318 million in outflows, followed by BlackRock's IBIT and Fidelity's FBTC according to data. Analysts attribute the retreat to institutional de-risking ahead of year-end, weak retail participation, and a broader flight to safety in global markets.

Bitcoin's decline has been exacerbated by thinning liquidity and a surge in downside protection bets. Open interest in put options at strike prices of $85,000 and $90,000 now exceeds bullish positions at $120,000 and $140,000, signaling deepening bearish sentiment. Over $1.3 billion in leveraged positions were liquidated in the past 24 hours, compounding pressure on the market. The fear and greed index on CoinMarketCap neared "extreme fear," reflecting heightened expectations for further declines.

The crypto slump has mirrored a broader selloff in U.S. equities, particularly in tech stocks linked to artificial intelligence. Investors are re-evaluating the Fed's policy trajectory after recent hawkish comments from officials dimmed prospects for rate cuts in December. "Crypto's beta to macro risks will stay high until deeper institutional participation broadens beyond Bitcoin and Ether," said Max Gokhman, deputy CIO at Franklin Templeton according to reports. Yat Siu of Animoca Brands noted that "less money in the system" has forced investors to "sell certain things off" to address liquidity concerns.

Bitcoin's technical outlook has worsened as it breaks below key support levels. The price fell below its 50-week moving average for the first time since 2023, invalidating a two-year uptrend. A weekly close below $93,500 - the level at which Bitcoin started 2025 - would fully erase its annual gains. Analysts like Axel Adler Jr. warn that "no support left in the market" remains as short-term holders face near-capitulation losses.

Despite the turmoil, some market participants see potential for stabilization. Michael Saylor of MicroStrategy announced plans to "buy a lot" of Bitcoin, urging investors to "HODL" amid the volatility according to reports. However, most experts caution that the selloff reflects structural challenges, including waning institutional demand and a lack of catalysts to reignite bullish momentum.