Bitcoin’s Freefall: U.S. Data Chaos Sends Crypto Into Tailspin

The cryptocurrency market entered the week under heavy pressure, driven by renewed uncertainty over the U.S. Federal Reserve’s rate path and by investor anxiety over delayed economic data stemming from the recent U.S. government shutdown. The combination created a perfect storm for digital assets, sending Bitcoin sharply lower and igniting a broader market selloff.

Within 24 hours, Bitcoin plunged more than 5.9%, briefly touching $89,303, marking the first time in nearly seven months that the world’s largest cryptocurrency fell below the psychologically critical $90,000 threshold. The weekly loss exceeded 15%, signaling a rapid cooldown in bullish sentiment after months of resilience.

The downturn reflects a dramatic shift in investor expectations. Just weeks ago, markets were heavily pricing in Federal Reserve rate cuts beginning early next year. However, mixed economic signals—coupled with postponed data releases—have prompted traders to reassess the Fed’s timing. As expectations for immediate monetary easing fade, risk assets such as cryptocurrencies are among the first to suffer.

The last time Bitcoin experienced a similar deep correction was in April 2025, when global markets were shaken by then-President Donald Trump’s aggressive tariff actions. The currency briefly fell to $74,400, underscoring how sensitive crypto remains to macroeconomic disruptions.

Fed Uncertainty Sends Shockwaves Through Crypto

The abrupt loss of momentum in crypto markets stems largely from shifting expectations about U.S. central bank policy. Investors had anticipated that slowing inflation and fragile economic indicators would prompt the Federal Reserve to move faster toward rate cuts. But the recent data blackout, caused by delayed U.S. government economic releases, left markets flying blind.

In the absence of reliable data, investors grew cautious, and the narrative shifted from optimism to defensive positioning. With no clear timeline for interest-rate relief and the possibility that inflation could still run hot, markets reassessed risk. Cryptocurrencies—historically sensitive to liquidity conditions—reacted immediately.

Bitcoin’s move below $90,000 triggered technical selling, further amplifying the decline. Analysts note that the level is not just a price floor but also a psychological pillar for retail and institutional traders alike.

Ethereum and Altcoins Hit by Contagion

Bitcoin’s slump rippled across the broader digital asset market. Ethereum (ETH), the second-largest cryptocurrency by market capitalization, fell 6.44%, dropping to $2,980. It was the first significant test of the asset’s short-term support levels after several months of steady consolidation.

Meanwhile, Ripple (XRP) also faced selling pressure, sliding from its earlier $2.25 level to $2.14 as traders reduced exposure across the board.

Market watchers say the reaction was predictable: when macroeconomic uncertainty increases, altcoins often experience sharper declines than Bitcoin due to higher volatility and lower liquidity. The latest downturn reinforces that dynamic.

A Market Waiting for Clarity

Crypto’s pullback reflects a broader trend across global risk assets, as equity and bond markets also saw increased volatility on concerns over interest rates and economic trajectory. For crypto specifically, the next phase depends heavily on two key developments:

1. The Resumption of U.S. Economic Data Releases
Traders need clarity on inflation, employment, and growth trends. Without data, speculation—not fundamentals—drives pricing.

2. Fed Communication in the Weeks Ahead
Any signal regarding the timing or pace of future rate cuts could either stabilize crypto markets or deepen losses.

Until then, volatility is likely to remain elevated.

Long-Term Investors Stay Calm, But Traders Brace for More Turbulence

Despite the sharp correction, long-term institutional holders appear unfazed. Blockchain data suggests that long-term wallets have not rushed to sell, implying that seasoned investors view this downturn as part of a larger macro cycle rather than a fundamental shift in crypto’s trajectory.

Short-term traders, however, are bracing for further swings. With Bitcoin hovering dangerously close to its medium-term support levels, any additional negative macro signals could push the price into deeper correction territory.

For now, the crypto market is locked in a holding pattern—waiting for the Fed, waiting for data, and waiting for a new direction.