Bitcoin fell below $110,000 as traders reacted to mixed U.S. macro data expectations and political turmoil that may alter the Federal Reserve’s policy path. Short-term selling, amplified by weekend liquidity, pushed BTC lower with large long liquidations and heightened volatility ahead of key GDP and PCE releases.
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Price drop: Bitcoin slid 2.8% to $109,882 with over $940 million in liquidations.
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Political risk: The firing of a Fed governor and market reaction increased uncertainty for rate decisions.
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Macro risk: Revised GDP and core PCE prints this week could change September rate-cut expectations.
Bitcoin fell below $110,000 after political shocks and looming U.S. GDP/PCE data; track risks and prepare for volatility — read expert analysis and next steps.
What caused Bitcoin to fall below $110,000?
Bitcoin fell below $110,000 as traders rotated out of risk ahead of U.S. GDP and core PCE data and reacted to political developments affecting the Federal Reserve. Thin weekend liquidity amplified moves, producing large long liquidations and pushing price to $109,882 on Monday.
How did liquidations and market structure amplify the move?
Liquidations topped $940 million over 24 hours, led by long positions, according to CoinGlass data. Thin weekend order books magnified selling. Short-term holders faced stop-loss cascades near the average cost basis for recent buyers, increasing alarm among spot and derivatives traders.
Why does political turmoil matter for Fed policy and Bitcoin?
Political actions that affect Fed governance can change market expectations for rate cuts. The recent dismissal of a Fed governor and related accusations increased perceived policy risk. Market volatility rose as the U.S. dollar index briefly shed 1% before stabilizing at 98.32, and U.S. equity futures fell.
What macro data should traders watch this week?
Traders are focused on revised Q2 GDP and year-over-year core PCE inflation. Economists expect GDP to be revised to 3.1% from 3.0% and core PCE to tick up from 2.8% to 2.9% (MarketWatch). A softer growth print or higher-than-expected inflation could change the Fed’s rate path and market sentiment.
Frequently Asked Questions
How low could Bitcoin fall if the Fed delays rate cuts?
If the Fed signals a delay in rate cuts, risk assets could see extended weakness. Historically, failure to hold above recent investor cost bases (around $110,800) has preceded multi-month weakness, according to on-chain analytics providers such as Glassnode.
What triggered the political shock and market reaction?
Markets reacted after the U.S. President removed a Federal Reserve governor; the resignation letter posted on TruthSocial cited alleged misconduct. Experts warned the move increases uncertainty about Fed independence and could weigh on markets, per commentary from academics at the University of Michigan.
Key Takeaways
- Immediate cause: Short-term selling and >$940M of long liquidations pushed BTC to $109,882.
- Political risk: Fed governance changes increased uncertainty and market volatility.
- Macro pivots: Upcoming GDP and core PCE prints could materially affect Fed timing for rate cuts; monitor releases closely.
How to monitor risk this week
Follow the revised Q2 GDP and core PCE publications and watch liquidity conditions in spot and derivatives markets. Track long liquidation metrics and dollar index moves. Keep position sizing conservative and set clear stop-losses given elevated volatility.
Conclusion
Bitcoin’s slide below $110,000 reflects short-term risk aversion driven by political developments and looming U.S. macro data. Market participants should watch revised GDP and core PCE prints, liquidation flows, and dollar dynamics. COINOTAG will continue monitoring price action and policy signals; prepare for heightened volatility and adjust risk management accordingly.
Published: 2025-08-26 • Updated: 2025-08-26 • Author: COINOTAG
