Driven by a combination of factors—including higher-than-expected U.S. inflation data, rising expectations of a Federal Reserve rate hike, and a sell-off in tech stocks—Bitcoin fell as much as 2.3% on Wednesday, approaching the lower end of its recent trading range, with the price hovering around $81,700. The U.S. Consumer Price Index for September, released on Wednesday, showed that price increases hit their highest level since April, prompting traders to increase their bets on further interest rate hikes by the Federal Reserve. At the same time, semiconductor stocks were sold off, the Nasdaq 100 Index fell 2%, and the U.S. dollar rose to its highest level since May 2025. Rising inflation, a stronger U.S. dollar, and a pullback in tech stocks collectively dampened investors’ appetite for high-risk assets, putting pressure on the cryptocurrency market as well. Shares of Coinbase (COIN), Circle Internet Group (CRCL), and Strategy (MSTR) fell 4.9%, 5.6%, and 5.9%, respectively.
Market trends have diverged markedly from analysts’ expectations. A report released by cryptocurrency research firm CryptoQuant shows that Bitcoin’s 30-day analyst consensus index rose from -18.3 in July to 49.2, with the proportion of analysts bullish on Bitcoin increasing from 37% to 84%, indicating that industry researchers have turned optimistic about the market outlook. However, this optimism has not driven sustained price gains. During the crypto market crash over a year ago, single-day leveraged position liquidations hit a record high of $19 billion. As of now, Bitcoin remains more than 30% below its all-time high; repeated rebounds have failed to sustain an upward trend, and traders have not rebuilt the leveraged positions that previously fueled the crypto market’s surge, leaving Bitcoin lacking the momentum for a breakout.
Matt Hougan, Chief Investment Officer at Bitwise Asset Management, believes that the current global financial market environment remains severe. High inflation and high energy prices have tightened global monetary liquidity, while market concerns about the investment outlook for large tech companies and artificial intelligence continue to weaken investors’ appetite for risk assets. Multiple macroeconomic factors are collectively limiting the performance of risk assets, making it difficult for Bitcoin to break out of its volatile trading pattern in the short term. However, Hougan remains bullish on Bitcoin’s future trajectory; he believes Bitcoin bottomed out in June of this year and expects its price to be higher than current levels by the end of the year.
Overall, although bullish sentiment among cryptocurrency analysts has clearly increased, inflationary pressures in the U.S., expectations of interest rate hikes, and a tightening liquidity environment continue to limit Bitcoin’s short-term upside potential. The market is continuously assessing the direction of the Federal Reserve’s monetary policy and the impact of the AI boom on risk assets. Whether Bitcoin can break out of its current range and initiate a sustained rally ultimately depends on macroeconomic trends and shifts in investor risk appetite.
