Bitcoin has encountered yet another decline, falling below the $108,000 mark, as it sustains its tumultuous trajectory over recent weeks. The situation comes amid increased trade tensions between the United States and China, causing investors to curb their risk appetite. With this backdrop, markets are shifting their focus towards imminent macroeconomic developments.
Macroeconomic Concerns Impact Cryptocurrency Prices
According to CoinMarketCap data, Bitcoin dipped by 2.6% over the past 24 hours, landing at $107,854. After soaring briefly above $111,200 on Monday, the cryptocurrency faced renewed selling pressure. Jeff Mei, COO of BTSE, noted that this market volatility is directly fueled by macro concerns, stating, “As long as the trade tension between the U.S. and China persists, volatility is inevitable.”
Mei believes the trend towards risk aversion among investors became pronounced ahead of a meeting scheduled between Chinese President Xi Jinping and U.S. President Donald Trump in South Korea at the end of October. Although analysts see a potential agreement as plausible, the chances of completely resolving tensions seem slim. These expectations have fostered a cautious stance in the markets.
ETF Outflows and Weak Sentiment Weigh on the Market
The macro pressures were also felt among altcoins. Ethereum, the largest altcoin, fell 4.77% to $3,855, while BNB declined 5.36% to $504, and Solana dropped 4.26% to $172. There were also outflows from spot cryptocurrency ETFs. According to SoSoValue data, Bitcoin ETFs saw a net outflow of $40.5 million, and Ethereum ETFs recorded $145.7 million in outflows. This trend aligns with last week’s record weekly outflow of $1.23 billion, further reinforcing the weakness in investor sentiment.
The Block’s Fear and Greed Index was measured at 29, indicating a clear atmosphere of fear in the markets. Jeff Mei remarked, “The unpredictability of macro developments poses the biggest risk to crypto markets. Investors should turn to diversification and hedging strategies.” Currently, investors are focused on the Consumer Price Index data set to be released on Friday and the Federal Reserve’s potential 25 basis point rate cut. CME Group’s FedWatch Tool shows a 98.9% probability of a rate cut.