Key takeaways:

• Strong US economic data and rising gold prices shift investor focus away from Bitcoin’s upside.

• Regulatory uncertainty and vague US Strategic Bitcoin Reserve plans keep BTC price down despite macro tailwinds.

Bitcoin (BTC) failed to reclaim the $110,000 level on Friday, despite high expectations from traders following the monthly BTC options expiry. Hopes for a post-expiry rally were dashed as bearish momentum continued, driven by several headwinds, including macroeconomic data and a possible investigation targeting listed cryptocurrency treasury companies.

The US Commerce Department reported Friday that the Personal Consumption Expenditures (PCE) price index rose 2.7% in August compared to the previous year, matching economists’ forecasts. Persistent inflation is one of the reasons the US Federal Reserve remains cautious about lowering interest rates.

Bitcoin fails to keep up despite gold nearing a record high

Traders have dialed back their expectations for interest rates to fall to 3.75% or lower by the end of the year, based on futures markets.

The CME FedWatch tool currently shows a 67% implied probability of two 0.25% rate cuts by year-end, down from 79% just a week ago. Bitcoin traders’ frustrations were further amplified as gold surged to $3,770 on Friday, just 0.5% shy of its all-time high, signaling that investors are leaning toward traditional safe-haven assets amid uncertainty.

The S&P 500 posted gains on Friday after data showed a 0.6% rise in US consumer spending for August. Economists had previously anticipated a slowdown in spending toward year-end, citing rising prices and concerns over a weakening labor market, according to Yahoo Finance.

A strong US economy tends to support stock markets by driving corporate earnings and lowering perceived risk, particularly amid growing worries about the escalating trade war. US President Donald Trump’s administration recently introduced another round of import tariffs, including a 100% duty on patented pharmaceuticals.

Regulatory pressure and policy delays frustrate Bitcoin traders

Beyond macroeconomic factors, the cryptocurrency market has faced its own challenges, adding further pressure to Bitcoin’s already struggling price.

A Wall Street Journal report on Thursday revealed that several cryptocurrency treasury firms had been contacted by US regulators. The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority reportedly raised concerns about unusually high trading volumes prior to corporate announcements.

Regulations prohibit public companies from selectively disclosing material, nonpublic information—prompting suspicion over sharp gains in certain listed stocks days before relevant disclosures. “It’s typically the first step in an investigation. Whether it goes full, full length, it’s anybody’s guess,” David Chase, a former SEC enforcement attorney, told WSJ.

Related: Crypto markets are down, but corporate proxies are doing far worse

Traders are also growing increasingly frustrated with the lack of follow-through on the US strategic Bitcoin Reserve plan. Although the Executive Order signed in March referred to “budget-neutral” strategies to accumulate Bitcoin, no concrete steps have been announced. Despite repeated promises to audit the government’s cryptocurrency holdings, no action has been taken.

In the end, Bitcoin’s price continues to face pressure from a favorable macroeconomic backdrop supporting the stock market and mounting uncertainty from a possible SEC investigation and the opaque status of US Bitcoin reserves.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.