Bitcoin falls to a six-month low as the sense of risk persists

Bitcoin fell to its lowest level in six months on Friday as a broad sell-off in risk assets deepened, while hopes faded that the Federal Reserve would cut US interest rates at its upcoming policy meeting. However, US stock sales fell slightly in the afternoon ahead of the weekend, but investors remained tense as they braced for a slew of economic data next week following the government’s reopening following a record 43-day shutdown.

“Bitcoin and crypto have generally been positively correlated with good times in stocks, so it has not become an alternative value asset to hedge against fear in other sectors,” said Juan Perez, trading director at Monex USA in Washington. “If there’s no enthusiasm for risk-taking, it seems like that also translates into hesitation with bitcoin and the like.” Overall, risk assets have come under pressure in recent days as expectations for a Fed rate cut next month have dwindled as a growing number of policymakers signaled

tendency to postpone the relaxation. Kansas City Fed President Jeffrey Schmid, a constituent on the policy-setting Federal Open Market Committee, was the latest central bank official to express doubts about a rate cut in December. He said Friday that his concerns about “too high” inflation go far beyond the limited effects of tariffs alone.Markets are now pricing in around a 40% chance of a rate cut in December, up from around 90% earlier this month and just over 60% earlier this week.

In early afternoon trading, Bitcoin, the world’s largest cryptocurrency, was last down 2.3% at $96,564, after earlier falling to $95,885.33, the lowest since May 7.

Ether, the second-largest cryptocurrency, was last flat that day at $3,175.22 after falling to a 10-day low.

Dave Rosenberg, founder and president of Rosenberg Research, said bitcoin is in “official bear market territory, having fallen more than 20% in barely more than a month.” He also pointed to massive redemptions at exchange-traded funds, which totaled $870 million on Thursday alone.

Since peaking on October 7, the cryptocurrency market cap has fallen by more than $1 trillion, or 24%.

The backdrop for bitcoin remains bearish, analysts said.

Longtime bitcoin holders have accelerated profit-taking, according to crypto research firm Glassnode. These long-time bitcoin holders have sold 815,000 bitcoin in the past 30 days, an all-time high since January 2024, according to CryptoQuant, another digital asset research firm.