The cryptocurrency market is experiencing turbulence as Bitcoin faces downward pressure due to macroeconomic factors and shifting market sentiment. Strong U.S. economic data and rising bond yields have heightened expectations of a more hawkish Federal Reserve, prompting a risk-off sentiment among investors. This has led to Bitcoin's price slipping significantly, exacerbated by the liquidation of nearly $1 billion in leveraged positions across crypto assets. The market is adjusting to a "higher for longer" interest rate scenario, as noted by Cosmo Jiang of Pantera Capital. Additionally, Cathie Wood's Ark Invest has taken a cautious stance by selling over 36,000 shares of its Bitcoin-backed ETF, further contributing to the bearish sentiment.
The Proshares Ultra Bitcoin ETF (BITU) has mirrored the underlying asset's decline, dropping 5.21% to $49.35 as of 3:40 PM on Wednesday, January 8.