The Bitcoin selloff is being driven by hot U.S. inflation data, a Democratic midterm sweep that stalls the CLARITY Act and heavy ETF outflows.
Fawad Razaqzada, StoneX Media Market Analyst, breaks down the inflation, policy and chart pressures behind Bitcoin's renewed slide after five straight weekly losses.
Hotter-than-expected U.S. CPI readings on both headline and core inflation have revived concern that the Federal Reserve may need to raise interest rates further and hold them higher for longer. Bitcoin, gold and other zero-yielding assets tend to struggle when rate expectations rise, because the opportunity cost of holding them increases. The Democratic sweep at the U.S. midterm elections dims the near-term prospects for the CLARITY Act, the industry-backed bill aimed at classifying certain digital assets as commodities, leaving it facing steep resistance or gridlock. Institutional demand has reversed alongside it, with U.S. spot Bitcoin ETFs recording around $1.28 billion in weekly outflows and more than $1 billion in leveraged crypto positions reportedly liquidated within 24 hours.
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