Bitcoin drops below $67,000 as hawkish Federal Reserve expectations pressure the crypto market

On February 11, news reports indicate that influenced by the shift toward a hawkish outlook in U.S. macroeconomic prospects, Bitcoin and mainstream cryptocurrencies collectively weakened in early Wednesday trading. Data shows that Bitcoin’s price fell below $67,000, declining about 3% in the past 24 hours to around $66,800; Ethereum also retreated to approximately $1,960. Major tokens like XRP and BNB each dropped over 4%, with market risk appetite significantly cooling.

Analysts point out that the core driver of this correction stems from a re-pricing of expectations regarding U.S. monetary policy. Andri Fauzan Adziima, Head of Research at Bitrue, stated that after Kevin Warsh was nominated as Federal Reserve Chair, the market generally believes future policies will lean more toward tightening, with liquidity conditions likely to remain restrictive and room for rate cuts shrinking. This expectation directly dampened the willingness to allocate to high-risk assets.

From a derivatives perspective, Vincent Liu, Chief Investment Officer at Kronos Research, said that the recent rapid decline has cleared most excess leverage, and funding rates and position structures indicate the market is undergoing a deleveraging process. He also noted that institutional funds remain cautious, waiting for clearer catalysts such as continued ETF inflows or new macro signals.

On-chain and funding data also show divergence. On Tuesday, spot Bitcoin ETFs recorded approximately $166 million in net inflows, higher than the previous trading day, while spot Ethereum ETFs saw a significant slowdown, with inflows of only about $13.8 million. This suggests that long-term funds are still positioning but with a more cautious pace.

In traditional markets, Asian stocks rose in early Wednesday trading, with the Korea KOSPI index up over 1% and Hong Kong’s Hang Seng index slightly higher; U.S. stocks showed mixed performance the previous day. The market is awaiting upcoming U.S. employment data to gauge the direction of interest rates and global risk asset sentiment.

Against the backdrop of ongoing macroeconomic uncertainty, whether Bitcoin can hold the $60,000 to $65,000 range will be a key focus for the short-term market. (The Block)