Bitcoin Falls Below $111K as Strong U.S. GDP Data and Higher Yields Rattle Crypto Markets

What to Know

• Bitcoin slid below $111K for the first time since early September, while ETH led steeper altcoin losses.
• A U.S. GDP revision showed 3.8% growth in Q2, much stronger than expected, pushing yields higher.
• Fed rate cut expectations eased, sparking a sell-off in risk assets, including crypto-related stocks like MSTR, COIN, and miners.

Bitcoin Under Pressure from Strong U.S. Data

Bitcoin’s (BTC) decline accelerated Thursday after fresh U.S. economic data rattled investor expectations for Federal Reserve policy easing. The U.S. Commerce Department reported that GDP expanded at a 3.8% annualized pace in the second quarter — well above the previous 3.3% estimate and significantly stronger than the 3% initially reported.

The robust data fueled a surge in Treasury yields, with the 10-year climbing to nearly 4.20%, its highest in three weeks. Risk assets, including equities and cryptocurrencies, faced immediate pressure as traders reassessed the likelihood of aggressive Fed rate cuts.

Employment Data Adds to Fed Uncertainty

Adding to the hawkish narrative, initial jobless claims dropped sharply to 218,000, down from 232,000 a week earlier and well below expectations of 235,000. The resilience of the labor market raised fresh doubts about a near-term slowdown in the U.S. economy.

According to CME’s FedWatch tool, traders now assign a 17% probability the Fed holds rates steady at its next meeting — up from just 8% a day earlier.

BTC and Altcoins Slide Deeper

Bitcoin fell as low as $111,000, marking its weakest level since early September, before bouncing slightly to trade around $111,500, down 1.6% on the day. Ethereum (ETH) suffered sharper losses, breaking below $4,000 to trade 4.5% lower in the past 24 hours.

Other altcoins posted even deeper pullbacks:

• Solana (SOL): -6% daily, -20% over the week.
• Dogecoin (DOGE): -3% at $0.2317.
• Avalanche (AVAX): -5% at $30.33.
• Sui (SUI): -6% at $3.21.

After months of outperformance, Ethereum’s ETH/BTC ratio has erased its gains for the year, slipping back to flat compared to a 20% increase just four weeks ago.

Read more: What are Altcoins? A Complete Guide to Bitcoin Alternatives

Crypto-Related Stocks Take a Hit

The sell-off extended into equity markets, where crypto-linked stocks endured sharp losses.

• MicroStrategy (MSTR): -4.5%
• Coinbase (COIN): -4.1%
• Miners: Cipher Mining (CIFR) -9.4%, HIVE Digital (HIVE), Bitdeer (BTDR), Bitfarms (BITF) down 6%-8%.
• Circle (CRCL): -4.4%
• Galaxy Digital (GLXY): -3.7%

Despite optimism from a Google AI hosting deal, miners saw heavy selling as risk sentiment deteriorated.

Outlook Ahead: Can Bitcoin Hold $111K?

The coming days could prove critical for Bitcoin as traders watch whether $111K holds as near-term support. A stronger U.S. economy, while positive on the surface, complicates the Fed’s path to rate cuts and could extend pressure on high-risk assets like crypto.

Until clearer signals emerge from the Fed, volatility is likely to remain elevated across both digital assets and crypto-related equities.

Q&A

Why is Bitcoin dropping right now?

Bitcoin’s sell-off is linked to stronger-than-expected U.S. GDP data, which pushed Treasury yields higher. Higher yields make risk assets like crypto less attractive, prompting traders to sell.

What does GDP have to do with crypto markets?

A stronger U.S. economy suggests the Federal Reserve may keep interest rates higher for longer. Since crypto thrives in looser monetary environments, stronger data dampens expectations for near-term rate cuts, putting pressure on BTC and altcoins.

Why are Ethereum and other altcoins falling harder than Bitcoin?

Altcoins typically carry more risk than Bitcoin. When market sentiment turns cautious, traders often sell altcoins more aggressively, which explains ETH’s sharper decline below $4,000 and double-digit losses for Solana over the week.

How are crypto-related stocks affected?

Publicly listed companies with crypto exposure — such as MicroStrategy, Coinbase, and miners — tend to move in tandem with Bitcoin. As BTC drops, investor sentiment in these stocks weakens, leading to sharp sell-offs across the board.

What price level should traders watch for Bitcoin?

The $111K level is now a critical support zone. If BTC holds above it, bulls may try to stabilize the market. A break below, however, could open the door for deeper declines, especially if yields continue rising.