Bitcoin Retreats From $90,000 as Weakening US Data Shifts Investor Focus to Safe Haven Assets

Bitcoin declined toward $88,158 in Friday trading as investors responded to deteriorating US economic indicators by rotating into traditional safe haven assets, challenging the digital asset’s recent attempts to establish support above the $90,000 psychological level. The world’s largest cryptocurrency by market capitalization traded 2.72% higher over 24 hours but remained down 2.29% for the week, reflecting broader uncertainty about Federal Reserve monetary policy direction.

The selloff intensified following the release of delayed US employment data that showed mixed signals about labor market health. November unemployment rose to 4.6% from the previous 4.4%, while employers added 64,000 jobs after losing 105,000 positions in October. The conflicting data, complicated by recent government shutdown disruptions, has left investors questioning the strength of the economic recovery and the Federal Reserve’s next moves.

Market participants increasingly view Bitcoin as a high-beta risk asset correlated with equity markets rather than a standalone store of value, according to recent analysis from Reuters. This shift in perception has made the cryptocurrency more sensitive to macroeconomic developments and monetary policy expectations, contributing to its recent volatility around the $90,000 level.

Federal Reserve officials cut interest rates by 25 basis points in their December meeting but signaled a more cautious approach for 2026, projecting only one additional quarter-point reduction next year. The “cut now, slow later” messaging has dampened expectations for aggressive monetary easing, reducing Bitcoin’s appeal as an alternative asset benefiting from loose monetary conditions.

November inflation data provided some relief, with the Consumer Price Index rising 2.7% year-over-year, below economist forecasts of 3.1% and down from the previous 3.0% reading. However, the positive inflation surprise failed to sustain Bitcoin’s momentum as investors remained focused on employment weakness and slowing economic growth indicators.

Digital asset investment products attracted $716 million in weekly inflows according to CoinShares data, bringing total assets under management to approximately $180 billion. Despite continued institutional interest, Bitcoin exchange-traded fund flows have shown volatility, with Glassnode characterizing recent activity as “quiet” with net flows trending negative on a short-term basis.

The cryptocurrency’s market dominance stands at 59.02% with a total market capitalization of $1.76 trillion, highlighting continued investor preference for Bitcoin over alternative digital assets amid uncertain market conditions. Trading volume reached $49.6 billion over 24 hours, reflecting heightened activity as the asset tested key technical levels.

Long-term Bitcoin holders have accelerated selling activity, with approximately 20% of the total supply reactivated over the past two years according to Bloomberg analysis. This selling pressure from early adopters, driven by profit-taking rather than altcoin speculation, is expected to subside in 2026 as institutional demand continues growing.

Standard Chartered revised its Bitcoin price target, reducing its end-2025 forecast from $200,000 to $100,000 while maintaining a $150,000 projection for 2026. The bank cited the need for sustained ETF buying and institutional adoption to drive future price appreciation in a more challenging macroeconomic environment.

Looking ahead, Bitcoin’s price trajectory will likely depend on upcoming Federal Reserve communications, labor market data releases, and institutional investment flows. The cryptocurrency faces a critical test of whether it can maintain support above $85,000 while broader markets navigate uncertainty around monetary policy and economic growth prospects.