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What exactly is going on with this big dump? To put it simply, it’s just a few unfortunate events happening at the same time.
Let's talk about the Fed first. Previously, everyone thought there would be a rate cut in the fourth quarter of this year, right? As a result, the inflation data just won't come down, and the core PCE stubbornly hovers above the 2% target. Powell directly stated in November that interest rates need to remain high. The data from the CME is even harsher; traders are now only giving a 30% chance of a rate cut in December, whereas a month ago that number was still 94%.
What about institutional funds? They are fleeing faster than anyone else. The US spot Bitcoin ETFs have been bleeding for five consecutive weeks, with a total outflow of $2.6 billion. BlackRock's IBIT withdrew $420 million in just one week, which is its worst record since its establishment.
Market sentiment has also collapsed. The Fear and Greed Index has plummeted to 16, which is definitely "extreme fear." Social media is abuzz with "Bitcoin big dump."