Bitcoin and the wider crypto market stumbled this week, with billions wiped out in liquidations and investor sentiment turning cautious ahead of key U.S. inflation data.
Key Points
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Bitcoin slipped under $110,000, while Ethereum and Solana saw steeper losses.
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Over $1.6 billion in leveraged crypto positions were liquidated, intensifying selling pressure.
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Traders now await U.S. inflation data that could influence the Federal Reserve’s next interest rate move.
Why did Bitcoin fall below $110,000?
Bitcoin slid more than 3% on Thursday, briefly dipping under $110,000 for the first time in weeks. Ethereum dropped nearly 6% to $3,887, its lowest point since August, while Solana and Dogecoin each fell more than 7%.
This sharp downturn erased over $140 billion from the crypto market in just days. Analysts point to cascading liquidations — when leveraged bets are forcibly closed — as the main culprit. According to CoinGlass, more than $1.1 billion in long positions were wiped out within 24 hours, with Ethereum accounting for the largest share.
The market weakness comes at a time when traditional stocks are also retreating from recent highs, amplifying the risk-off mood across financial markets.
What role do ETF outflows and corporate treasuries play?
Institutional flows have been cooling. U.S.-listed Ether ETFs saw nearly $300 million in outflows this week, reflecting growing caution among professional investors. Bitcoin spot ETFs also faced over $360 million in withdrawals in a single day, led by Fidelity’s Wise Origin Bitcoin Fund.
Meanwhile, the corporate treasury model — where companies like MicroStrategy (MSTR) accumulate Bitcoin as part of their balance sheet strategy — is under scrutiny. Many of these stocks now trade close to the value of their crypto holdings, with premiums narrowing. This means investors no longer view them as high-growth plays but as direct proxies for token prices.
Mark Cuban, however, defended the treasury strategy, calling crypto assets an “alternative hedge” against inflation, much like gold in past decades.
How is macroeconomics shaping the crypto outlook?
Crypto markets are increasingly sensitive to U.S. economic data. Investors are bracing for Friday’s Personal Consumption Expenditures (PCE) report — the Fed’s preferred inflation gauge.
If inflation comes in hotter than expected, the central bank could take a more hawkish stance, pressuring risk assets like Bitcoin. On the flip side, a cooler reading could pave the way for another interest rate cut, injecting fresh liquidity that may revive crypto prices.
Currently, traders assign an 83% probability that the Fed will cut rates at its next meeting, though uncertainty has risen as job market and GDP figures send mixed signals.
What it means for investors
For long-term holders, Bitcoin hovering near $110,000 still represents remarkable strength — just a month after setting new all-time highs above $124,000. But short-term traders should expect continued volatility, especially as leveraged bets unwind and liquidity tightens.
Diversification, strict position sizing, and avoiding excessive leverage remain critical strategies in this environment.
Conclusion
Bitcoin’s pullback highlights the fragility of momentum-driven rallies. While institutional adoption, new ETFs, and macro shifts still support a long-term bullish case, the near-term outlook depends heavily on inflation data and Federal Reserve policy. For now, caution is the market’s dominant theme.
FAQs
Is Bitcoin still a good investment in 2025?
Yes, but only for investors with a long-term horizon. Despite recent volatility, Bitcoin remains one of the top-performing assets of the year. However, its swings mean it should be only a small portion of a diversified portfolio.
Why are crypto prices so volatile right now?
Crypto markets are reacting to three main factors: heavy ETF outflows, $1.6 billion in leveraged position liquidations, and uncertainty around U.S. inflation data. Together, these have fueled rapid price swings.
What is the risk with companies holding Bitcoin as a treasury asset?
When Bitcoin prices fall, the value of these corporate treasuries also drops, which can pressure balance sheets. Some firms trade almost entirely in line with Bitcoin’s price, making them risky “high-beta” plays on crypto.
Could Bitcoin rebound in October?
Historically, September has been a weak month for crypto while October — sometimes called “Uptober” — tends to bring tailwinds. If inflation cools and ETF inflows resume, Bitcoin could regain momentum in the coming weeks.