- Major cryptocurrencies, including Bitcoin and Ethereum, experienced sharp declines, with Bitcoin falling over 6% and Ethereum down more than 10%.
- Expectations for a U.S. Federal Reserve interest rate cut dropped after hawkish comments from central bank officials, with only about 52% of traders now anticipating a cut.
- Spot Bitcoin and Ethereum exchange-traded funds recorded large net outflows, with Bitcoin outflows reaching $870 million in a single day.
- Economic activity in China slowed in October, raising concerns about global growth.
- Retail investor sentiment for Bitcoin shifted from bullish to neutral, reflecting increased caution.
On Friday, major cryptocurrencies faced significant declines as market concerns mounted over the potential for U.S. interest rate cuts and weak economic signals from China. Bitcoin dropped by more than 6% to approximately $96,969, while Ethereum declined 10.2% to around $3,170. XRP also fell 8%, landing near $2.30. Other digital assets, such as Solana and Dogecoin, also experienced notable losses.
Investor sentiment shifted after recent statements from Federal Reserve governors reduced the likelihood of an interest rate cut in December. According to the CME Group’s FedWatch tool, about 52% of traders now anticipate a rate cut, down from over 62% one day earlier. Minneapolis Fed President Neel Kashkari publicly stated he did not support an October rate cut, citing ongoing U.S. economic strength. San Francisco Fed President Mary Daly remarked it was premature to make a decision on interest rates ahead of the next Federal Open Market Committee meeting in December.
Official data showed that China’s economic activity slowed at the start of October, causing further uncertainty. Industrial output grew 4.9% year-on-year, the slowest rate since August 2024 and below the previously estimated 5.5% increase as reported by Reuters. Retail sales in China also recorded their weakest pace in over a year, rising 2.9%, slightly above expectations but slower than the prior month.
Retail sentiment among investors turned more cautious. Bitcoin’s sentiment rating changed to ‘neutral’, with some community members noting concerns over recent price movements. One user stated, “Finally feeling concerned now. Won’t go as far as saying we’re done, but this price action really isn’t good.”
Spot cryptocurrency ETFs faced large withdrawals, with net outflows totaling $870 million for Bitcoin on Thursday, according to SoSoValue data. Ethereum ETFs also saw nearly $260 million in net outflows. Industry stocks were affected as well: Michael Saylor’s Strategy fell 7.1%, while Bitcoin mining companies IREN, Mara Holdings, and Cipher Mining dropped between 11% and 14%.
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