Bitcoin Falls Below $105K Amid Fed Hawkishness and Market Liquidations

Bitcoin has experienced significant downward pressure recently, with market sentiment turning cautious amid macroeconomic challenges such as the strengthening U.S. dollar and the ongoing government shutdown. Cryptocurrency bettors on Polymarket now assign over a 70% probability that Bitcoin will fall below $100,000 this month, a sharp increase from previous estimates, coinciding with Bitcoin's drop below $104,000. Despite strong institutional interest, including a record $3.55 billion inflow into Bitcoin ETFs in early October, Bitcoin's price has declined approximately 15% from its all-time high, reflecting a tug-of-war between bullish long-term narratives and immediate market risks. Large holders appear to be reducing their positions, signaling a consolidation phase after a volatile October marked by significant liquidations and ETF outflows, while on-chain data shows institutional demand dipping below new coin issuance for the first time in seven months. Federal Reserve policy uncertainty and mixed economic signals contribute to the cautious market environment, with traders pricing in reduced odds of imminent rate cuts. Overall, Bitcoin is navigating a complex landscape of profit-taking, macroeconomic headwinds, and shifting investor behavior that may set the stage for either stabilization or further declines below critical psychological levels.