Bitcoin Hits Six-Month Low as Fed Policy Uncertainty Weighs on Risk Sentiment

Bitcoin slid to a six-month low on Thursday, briefly touching $86,270 as shifting expectations around U.S. monetary policy and stronger-than-expected employment data curbed investor appetite for risk.

The cryptocurrency's decline mirrors a broader pullback across financial markets after U.S. employment figures for September showed the economy added 119,000 jobs, well above the 50,000 forecast. The stronger data complicated expectations for a potential Federal Reserve rate cut next month, adding pressure on both crypto and equities.

Market analysts say sentiment has turned cautious. James Butterfill, Head of Research at CoinShares, noted that "crypto is suffering from heavy selling by whales who follow the four-year cycle narrative," adding that large holders have sold more than $20 billion since September. While he said the firm does not view the cycle theory as fundamentally sound, he acknowledged it has become "somewhat self-fulfilling."

Bitcoin's weakness follows a series of destabilizing events over recent months. The October 10 flash crash triggered by renewed U.S.–China trade tensions prompted some participants to step away from the market, reducing order depth and heightening price swings, according to Peter Chung of Presto Research. Earlier in October, sharp liquidations of leveraged positions also set the stage for increased volatility, leaving prices more sensitive to macroeconomic data and Fed policy signals.

The recent downturn comes even as U.S.-listed spot Bitcoin ETFs showed signs of stabilizing. After five consecutive days of heavy outflows, the products recorded $75 million in net inflows on November 19, according to Farside Investors. BlackRock's iShares Bitcoin Trust accounted for the majority of the rebound with $60.6 million in inflows. Fidelity's FBTC, by contrast, posted $21.4 million in outflows, while other funds saw no net change.

Despite the modest ETF inflow recovery, analysts say broader uncertainty—from macroeconomic indicators to investor positioning—continues to shape Bitcoin's direction in the near term.