Bitcoin slides below $67,000 as traders digest hawkish US macro outlook

Bitcoin BTC, Ethereum and other major cryptocurrencies slid further early Wednesday as traders digested a more hawkish macro outlook.

Bitcoin fell below the $67,000 mark, down 3.1% over the past 24 hours to $66,804 as of 1:13 a.m. ET Wednesday, according to The Block's price page. Ether dropped 4.1% to $1,965. XRP fell 4.3%, and BNB slid 4.5%.

Analysts mainly attributed the latest crypto selloff to shifting expectations around U.S. macro policy. Andri Fauzan Adziima, research lead at Bitrue, said the move lower followed a "hawkish shift in Fed expectations" after Kevin Warsh’s nomination as Federal Reserve chair, which signals "tighter liquidity and fewer rate cuts ahead."

"Traders now watch for stabilization around $60,000-$65,000 support or renewed macro easing to spark any rebound," said Adziima.

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Vincent Liu, CIO of Kronos Research, said derivatives data suggests much of the excess leverage has been flushed out. "BTC and ETH dipped as exchanges saw deep deleveraging, with funding rates signaling most leveraged positions have been cleared," Liu said. 

Liu added that institutional capital appears to be holding back, waiting for clearer catalysts such as sustained exchange-traded fund momentum or fresh macro signals before re-entering in size.

On Tuesday, spot bitcoin ETFs recorded $166.56 million in net inflows, up from inflows of $145 million the previous day, according to SoSoValue data. Spot Ethereum ETFs saw more modest inflows of $13.82 million, compared to $57 million in inflows on Monday.

Asian equities higher

Meanwhile, equities markets offered a mixed backdrop. 

Asian equities moved higher on Wednesday morning, led by South Korea's Kospi, which rose 1.24% by midday, while Hong Kong's Hang Seng index edged up 0.42%. Japanese markets were closed for a public holiday.

U.S. stocks showed varied results on Tuesday, with the S&P 500 declining 0.33%, while the Nasdaq Composite slipped 0.59%. The Dow Jones Industrial Average rose modestly by 0.1%. The divergence came as weaker-than-expected U.S. retail sales data showed consumer spending remained flat in December.

Traders will be watching Thursday's key U.S. labor market data for signs on the future path of interest rates and broader risk appetite, according to Liu.