Bitcoin Falls Below $110,000 Amid Economic Challenges
Bitcoin (BTC) continued its decline this week, dropping below $110,000 on Friday. Economic concerns and the Federal Reserve’s hawkish comments affected risk assets. A positive meeting between US President Donald Trump and China’s Xi Jinping did not improve market sentiment. Weekly outflows of over $600 million from US-listed spot Bitcoin ETFs suggest lower institutional demand. If this trend continues, Bitcoin’s price could fall toward $102,000.
Federal Reserve’s Hawkish Tone Pressures Bitcoin
Bitcoin started the week on a weak note. It faced resistance and dropped to $106,304 by Thursday. The price fall accelerated after Fed Chair Jerome Powell ruled out an interest rate cut in December. This followed a small 25 basis point cut in October. The Fed’s stance supports a stronger US Dollar, which usually hurts cryptocurrencies due to their inverse relationship. Economic uncertainty also grew as the US government shutdown entered its fourth week with no resolution in Congress.
Spot Bitcoin ETFs See Large Outflows, Adding Pressure
- Spot Bitcoin ETFs recorded outflows of $607 million this week.
- These flows reversed the inflows seen last week.
- Weakening institutional demand may push Bitcoin’s price lower.
Bitcoin’s price drop triggered $843 million in liquidations, mostly from long positions. The Fear and Greed Index fell to 29 on Friday, close to lows last seen in mid-October. This shows growing caution among investors.
US-China Trade Deal Fails to Boost Bitcoin
On Thursday, President Trump announced China would resume soybean purchases and that rare-earth issues had been resolved after talks with Xi Jinping. Despite this news, Bitcoin and other risk assets did not rise. Traders remain wary due to broader economic uncertainty.
Japan Launches First Yen-Backed Stablecoin
JPYC Inc. launched Japan’s first yen-denominated stablecoin, called JPYC, on Monday. It is backed 1:1 by Japanese Yen deposits and government bonds. The stablecoin is available on Avalanche, Ethereum, and Polygon blockchains. This move may support long-term growth for crypto adoption in Japan.
Signs of Corporate Buying Support Bitcoin
- Strategy added 390 BTC, holding 640,808 BTC valued at $47.44 billion.
- American Bitcoin, owned by Trump’s sons, bought 1,414 BTC, now holding 3,865 BTC.
- MetaPlanet announced a $495 million share buyback.
- Strive acquired 72 BTC, bringing holdings to 5,958 BTC.
These purchases show continued corporate confidence in Bitcoin despite recent price drops. Several altcoin ETFs, including Hedera, Solana, and Litecoin, also launched on Nasdaq, showing market interest beyond Bitcoin.
Technical Outlook Points to Potential Dip Near $102,000
Bitcoin’s price was rejected near $115,137 on Monday. By Thursday, it dropped 5.44% to around $110,000. If Bitcoin closes below the 61.8% Fibonacci retracement level at $106,453, the next support is near $102,000. The Relative Strength Index (RSI) is 45, indicating growing bearish momentum. The MACD also shows weakening bullish signals.
If Bitcoin holds above $106,453 support, it could rise toward the 50-day EMA at $112,905.
