Bitcoin Update: Federal Reserve Postponements and $1.2 Billion ETF Withdrawals Trigger 26% Drop in Bitcoin Value

Bitcoin is experiencing its lengthiest downturn of 2024, as shifting signals from the Federal Reserve inspire cautious hope for a possible recovery. The digital asset has dropped 26% since late October and is currently hovering near $83,000,

. This drop has surpassed the broader market’s volatility, with the S&P 500 falling 4.3% in November through Thursday, , while investors weigh the effects of postponed U.S. employment data and a waning appetite for riskier investments.

The main factor behind the sell-off has been the Fed’s decision to push back its rate-cut schedule. After failing to meet its October employment goal, the central bank indicated a more restrained stance on easing,

that only one or two rate reductions might occur in 2026. This more aggressive tone, together with over the past four weeks, has heightened worries about market liquidity. last week, marking its second-biggest weekly loss ever.

The

market’s slump has also revived concerns of a crash similar to 2018, and predicting a possible fall to $10,000. Meanwhile, optimistic projections from figures like Cathie Wood—recently adjusted from $1.5 million to $1.2 million for 2030—have faced skepticism, including . Despite the prevailing negative sentiment, for a rate cut in December, helping rebound above $84,000 after briefly slipping below $81,000.

This wave of selling has affected the wider financial landscape.

after suggesting that crypto-heavy treasury firms like MicroStrategy could be left out of major indexes if their crypto assets surpass 50% of total holdings. This has brought increased attention to index inclusion rules, that Strategy’s approach as a “Bitcoin-backed structured finance company” challenges conventional fund categories.

Across the broader market, the S&P 500’s performance in November has signaled a move toward more defensive industries,

. Amazon and Tesla, which together make up 42% of the ETF, have weighed heavily on the consumer discretionary index, .

Looking forward, investors are set to monitor inflation figures and manufacturing data closely,

in early December. These upcoming reports may further influence the Fed’s decisions and, consequently, the direction of bitcoin’s recovery.