Bitcoin Sinks Below $110k as Fed Turmoil and Data Loom
Bitcoin extended weekend losses on Monday, sliding 2.8% to $109,882 as traders reacted to political turmoil at the U.S. central bank and braced for critical economic data that could shape the Federal Reserve’s September decisions.
Liquidations over the past 24 hours topped $940 million, driven largely by long positions, according to market-liquidation trackers.
Analysts pointed to thin weekend liquidity amplifying moves and a rotation out of risk assets as contributors to the sharp drop. The descent pushed Bitcoin beneath roughly $110,800 — the average cost basis for investors who bought the asset over the last three months — a level on which failure to hold has historically preceded multi-month weakness and deeper corrections.
- Thin weekend liquidity amplifying volatility
- Rotation out of risk assets contributing to sell pressure
- Large long liquidations increasing downside risk
Market volatility intensified after President Donald Trump dismissed Federal Reserve Governor Lisa Cook. Her resignation letter, posted on TruthSocial after markets closed, accused her of “misleading conduct related to residency documents.”
“Her resignation letter … accused her of misleading conduct related to residency documents.”
The move rattled markets: the U.S. dollar index briefly shed about 1% before recovering to near 98.32, and U.S. futures for major equity indexes fell roughly 0.25%.
Traders are now focused on upcoming revised second-quarter GDP figures and core PCE inflation data, both seen as key inputs for the Fed’s outlook on potential rate cuts in September. With these macro prints due this week, investor positioning remains cautious and susceptible to further swings across crypto, equities and FX.
The confluence of political uncertainty at the Fed, sizable long liquidations and looming macro releases leaves Bitcoin vulnerable in the near term, as market participants await clearer signals on inflation and growth that will inform the Fed’s policy path.
