Simply put
- Bitcoin dropped 2.8% to $109,882, resulting in a liquidation of around $940 million.
- The market experienced turbulence following Trump’s dismissal of Federal Reserve Governor Lisa Cook, which momentarily impacted the dollar index.
- Investors are looking ahead to revisions of the second quarter GDP, along with core PCE inflation data, to gauge potential rate cuts in September.
Bitcoin continues to decline this week, extending losses seen over the weekend, as significant macroeconomic events loom that could influence the Federal Reserve’s decisions on interest rate cuts in September.
The cryptocurrency settled at $109,882 on Monday, marking a 2.8% decline in just the past 24 hours, impacting over $940 million mainly related to long positions.
“Capital is moving out of risk,” commented Rachel Lucas, a crypto analyst at BTC Market.
Amid these fluctuations, Bitcoin has pushed the average cost base of investors who purchased it below $110,800 over the last three months.
GlassNode noted, “Historically, failing to maintain above this level has often resulted in extended periods of market weakness and deeper corrections.”
The volatility in the market comes on the heels of President Trump’s firing of Federal Reserve Governor Lisa Cook.
In his resignation post, Trump cited allegations of “deceitful and possibly criminal” activities, claiming she forged documents connected to her main residence.
The news caused investors to react, with the US dollar index dropping to 98.32 after a 1% decline, while major US stock futures fell significantly.
“I don’t think this move will benefit American business,” stated Justin Wolfers, an economics professor at the University of Michigan.
He went on to express concerns, saying, “This is dangerous. It will help Trump, but not the country. If the president undermines the Fed, our economy could suffer.”
Eyes are currently on the revised GDP figures scheduled for Thursday, with economists predicting an upward revision to 3.1% from the initial 3% estimate.
Meanwhile, MarketWatch highlights that the year-over-year core PCE inflation rate is expected to confirm inflation levels between 2.8% and 2.9%.
However, sluggish growth coupled with higher-than-anticipated inflation could disrupt the Fed’s planned cuts this year.
