Bitcoin price drop below $110,000 hit on Tuesday, sliding 2.8% to $109,882 as thin liquidity met political shock. The sell-off followed the Lisa Cook firing by Donald Trump, stoking fears about the Federal Reserve’s policy path ahead of key U.S. data. With Q2 GDP revisions due Thursday and core PCE inflation on deck, markets are reassessing the odds of a September rate cut. Long liquidations surged, and U.S. futures and the U.S. dollar index wobbled as risk sentiment faded. Bitcoin investors and traders are bracing for more market volatility if data or policy signals disappoint.
Federal Reserve turbulence
The Lisa Cook firing injected policy uncertainty at a delicate moment for markets. Investors worry the move could pressure the Federal Reserve or blur its independence. That political overhang landed just as traders positioned for upcoming inflation and growth readings. The result: a sharp Bitcoin price drop below $110,000 and a fast pullback across risk assets. Confidence suffered, and intraday bounces struggled to stick.
Core PCE inflation watch
This week’s core PCE inflation print is the key catalyst. If inflation runs hot, the case for a September rate cut weakens. If it cools, relief could follow the Bitcoin price drop below $110,000. Traders will also parse the consumption details to judge momentum into Q3. The release lands alongside income and spending data that can sway second-half growth expectations.
Q2 GDP revisions ahead
Q2 GDP revisions can alter the macro narrative. A stronger revision could push yields higher and weigh on crypto. A softer revision might counter the Bitcoin price drop below $110,000 if it nudges the Fed toward easing. The growth mix—consumption, inventories, and investment—will matter for risk asset rotation. Markets want clarity, not ambiguity.
September rate cut odds
Rate path expectations are in flux. A clean disinflation trend would ease pressure after the Bitcoin price drop below $110,000. But any hawkish tilt could extend market volatility into September. Watch Fed speakers and futures-implied probabilities for direction. The first reaction often sets the tone for the week’s trading range.
Risk asset rotation
The weekend’s thin crypto market liquidity made swings larger. As headlines broke, money rotated away from higher beta plays. That pushed a second wave in the Bitcoin price drop below $110,000. If equities stabilize, crypto could catch a bid. For now, caution prevails while the data drip continues.
Long liquidations spike
Leveraged longs took a hit with nearly $940 million in long liquidations. That forced selling deepened the Bitcoin price drop below $110,000 and cleaned up crowded positioning. Glassnode notes that liquidity pockets are still uneven, which can amplify moves. Reduced leverage now sets a cleaner stage for the next trend.
U.S. dollar index moves
A brief slide in the U.S. dollar index offered little relief as U.S. futures also faded. Cross-asset weakness kept pressure on crypto despite the earlier DXY dip. Correlations can shift fast around macro events, so stay agile. The Bitcoin price drop below $110,000 reflects that fragility in real time.
What could stabilize sentiment
Clear, cooler core PCE inflation would help. So would a dovish-leaning cue on a September rate cut. Strong, liquid order books and steadier U.S. futures could slow the tape. For Bitcoin investors and traders, disciplined risk control is key while the Bitcoin price drop below $110,000 tests support.
Frequently asked questions about Bitcoin price drop below $110,000 (FAQ)
Why did Bitcoin price drop below $110,000 today?
A mix of political shock from the Lisa Cook firing, uncertainty about the Federal Reserve’s path, and upcoming core PCE inflation and Q2 GDP revisions drove risk-off flows and long liquidations.
How did Donald Trump factor into the move?
Donald Trump’s decision to remove a sitting Fed governor raised concerns about policy stability, which helped trigger the Bitcoin price drop below $110,000 amid already fragile sentiment.
What data could reverse the slide?
Cooler core PCE inflation and soft Q2 GDP revisions could revive the odds of a September rate cut, easing market volatility and supporting a recovery after the Bitcoin price drop below $110,000.
Will there be more long liquidations?
If support breaks on negative data or hawkish Fed signals, more long liquidations are possible. Improved crypto market liquidity and balanced leverage would reduce that risk.
What should Bitcoin investors and traders watch?
Track the U.S. dollar index, U.S. futures, Fed commentary, and on-chain flows highlighted by Glassnode. These signals frame the next move after the Bitcoin price drop below $110,000.
Sources to this article
Board of Governors of the Federal Reserve System 2025, Federal Reserve policy communications, FederalReserve.gov.
U.S. Bureau of Economic Analysis 2025, Gross Domestic Product, 2nd Quarter 2025 (Second Estimate), BEA.gov.
U.S. Bureau of Economic Analysis 2025, Personal Income and Outlays (Core PCE), BEA.gov.
Glassnode 2025, On-chain Market Update, Glassnode.com.
ICE Data Indices 2025, U.S. Dollar Index (DXY), TheIce.com.
