Bitcoin dipped under the $110,000 threshold on Friday, reflecting investor reactions to underwhelming outcomes from President Trump’s discussions with Chinese President Xi Jinping and cautious Federal Reserve guidance on potential interest rate reductions.
The downturn dragged other prominent cryptocurrencies lower, including Ethereum and Solana, which experienced significant declines alongside the flagship asset.
Earlier in the month, Bitcoin reached an all-time high of $126,080, a period market observers have termed “Uptober” for its pattern of robust gains in both digital currencies and equities.
Currently, the leading cryptocurrency is trading approximately 15% off that record level.
Technical analysis suggests Bitcoin’s price movement has produced a bearish Moving Average Convergence Divergence (MACD) crossover, a pattern that historically aligns with the conclusion of major upward cycles.
In prior bull markets of 2017 and 2021, similar MACD signals preceded Bitcoin’s peaks. Additional red flags include reduced blockchain engagement, signaling waning user interest.
Data from analytics firm Nansen reveals a 30% decline in daily active Bitcoin addresses during October, falling from 632,915 to 447,225.
The cryptocurrency derivatives market saw over $1.1 billion in positions wiped out in the last 24 hours, predominantly from bullish bets expecting further gains. Bitcoin accounted for nearly $500 million of these forced closures, while Ethereum contributed more than $250 million.
### Influence of U.S. Monetary Policy
The broader market retreat comes in the wake of Federal Reserve Chairman Jerome Powell’s remarks suggesting no additional rate cuts before year-end. Risk assets like cryptocurrencies and equities have historically thrived during periods of accommodative borrowing costs, with the central bank having lowered rates in its previous two sessions.
President Trump’s ongoing trade disputes, initiated upon his January inauguration, continue to unsettle investors. Abrupt tariff impositions have frequently triggered sharp sell-offs in Bitcoin and growth-oriented stocks, despite his pro-crypto stance. A recent 10% tariff reduction on Chinese imports, announced after talks in South Korea, failed to bolster sentiment, even as Trump described the accord as “truly great” and “amazing.”
Signs of stabilization emerged, however, with Bitcoin rebounding to around $109,000 after holding support at $106,400 on Thursday. The correction appears driven by investors locking in gains, compounded by the Fed’s reserved outlook on a possible December easing and the cascade of long-position liquidations on key trading platforms.
In related developments, MicroStrategy Chairman Michael Saylor indicated during the company’s third-quarter earnings discussion that it has no immediate intentions to acquire rival firms holding Bitcoin reserves, citing high uncertainty in such deals.
“We generally lack plans for merger and acquisition pursuits, even if they seem value-enhancing on the surface,” Saylor told shareholders. “These processes often span six to nine months or longer, and initial appeal can fade over time.”
Industry experts anticipate that as more corporations adopt Bitcoin as a balance-sheet asset and competition intensifies, consolidation through acquisitions could become more common to gain competitive edges.
