5 min readBitcoin fell for a third straight day on Thursday, dropping to 93K, as risk appetite is rattled by hawkish signals from the Federal Reserve. Prospective U.S. government coin sales are also weighing on the price.
Over the past 24 hours, $521 million has been liquidated from the crypto market, with $345 million coming from long positions triggered by the Bitcoin price falling briefly to 92.5k.
On Wednesday, BTC ETFs saw $582 million in outflows, its largest net outflow since December 19, when BTC price fell from 106k to a low of 95.7k.
Bitcoin has lost around 8 1/2 percent of its value over the past three days, wiping out its New Year’s rebound and tracking declines across risk assets.
A more hawkish Fed unnerves the market
Bitcoin falls amid a souring market mood following hawkish signals from the Federal Reserve. The minutes of the December Fed meeting showed that policymakers were prepared to slow the pace of rate cuts due to concerns surrounding higher inflation and continued strength in spending. The minutes also pointed to easing concerns over the outlook for the jobs market and economic activity.
Fed officials expressed concerns about the possible impact that President-elect Donald Trump’s policies could have on efforts to reduce inflation. When he takes office later this month, Trump is expected to cut taxes and impose trade tariffs.
Higher interest rates bode poorly for risk assets such as cryptocurrencies, given that they reduce liquidity.
The minutes come after a series of stronger-than-expected U.S. economic data, including ISM services PMI figures and US jobless claims, which fell to an 11-month low.
Attention will now turn to Friday’s nonfarm payroll report for further clues about the future path of rate cuts. The market is pricing in just one rate cut in 2025.
DOJ gets approval to sell 6.5 billion Bitcoin
Reports suggest that the US Department of Justice has received court approval to sell 69,370 Bitcoin, which was seized from a crackdown on the online black market Silk Road 10 years ago. The total value of the tokens amounts to $6.5 billion.
The DOJ has sold off crypto holdings in the past and was recently seen mobilising its Bitcoin hoard for a potential sale. Coinbase has a contract with the DOJ to handle such sales.
Not only does the sale add selling pressure, but it also crushes any hopes that the DOJ would convert its Bitcoin holdings into a strategic reserve under the incoming Trump administration.
Author
Risk Disclaimer
