Bitcoin fell to around $61,646 on Wednesday as the Personal Consumption Expenditures price index, the Federal Reserve's preferred inflation gauge, posted its highest reading in three years. The move coincided with stock market volatility and sent $600 million in crypto positions to liquidation in a single hour, according to market data.
The PCE report stoked concern that rate cuts, if they arrive, may come later or prove smaller than some traders had priced in. When inflation expectations shift sharply upward, equities tend to sell off and cash or short-term bond holdings become more attractive, a rotation that has dragged crypto assets lower alongside the broader market.
Bitcoin's move to 21-month lows marks its deepest drawdown since the 2022 bear market ended. The scale of hourly liquidations underscores how leveraged positions can amplify volatility when macro catalysts shift momentum suddenly. Traders holding futures positions on thin margin face forced exits as price swings exceed their cushion.
Some market participants flagged potential coordination in the selling. Without evidence, however, distinguishing between algorithmic stop-loss cascades and intentional price suppression remains difficult in real time. Large moves on macro days often look suspicious in the moment because they compress price discovery into short windows.
Bitcoin's correlation with equities has tightened over the past two years, reducing its appeal as a portfolio diversifier and binding its fate to risk-asset sentiment. When the Fed's inflation signal changes, stocks and crypto tend to move together now, a structural shift from earlier bull cycles when Bitcoin traded partly on its own narrative.