Bitcoin (BTC-USD) retreated on Thursday after a short-lived rebound, as investors await key US economic data that could shape the Federal Reserve’s path on interest rates.

The world’s largest cryptocurrency by market capitalisation (BTC-USD) was down 0.7% as of the time of writing, now changing hands for $111,786 (£82,015), having slipped back below the $112,000 threshold in early Asia trading hours. The token had briefly recovered on Wednesday, nearing $114,000, but momentum quickly faded.

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The drop comes after a wave of forced sell-offs earlier this week, when traders who had borrowed heavily to bet on bitcoin’s (BTC-USD) rise were caught out, triggering losses of around $1.5bn across crypto exchanges

Thin market liquidity and heavy speculative bets amplified the sell-off, sending bitcoin (BTC-USD) tumbling from above $115,000 to the low $112,000 area within 24 hours at the beginning of the week.

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Caution has dominated risk assets after Fed Chair Jerome Powell warned there was “no risk-free path” in monetary policy, stressing the dangers of both easing too quickly and holding back for too long. Other Fed officials echoed the need for a data-dependent approach, curbing investor appetite for risk.

According to current market pricing via the CME FedWatch tool, traders expect the Fed to ease rates from the current 4.5%–4.75% range toward roughly 3.5% to 4.0% by the end of 2025.

Traders are now looking to a fresh batch of US economic indicators for direction, including weekly jobless claims and a final Q2 GDP reading on Thursday, followed by the Fed’s preferred inflation gauge, the PCE price index, on Friday.

Losses have extended across the broader crypto market in the past 24 hours. Ethereum (ETH-USD) fell 4% to $4,013.33, hitting a seven-week low, while Solana dropped 3.2%, Cardano 2.7%, and Polygon 2.5%. Memecoins were also weaker, with Dogecoin (DOGE-GBP) down 2% and Official Trump lower by 1.5%. XRP (XRP-USD) held largely steady at $2.85.

Timothy Misir, head of research at BRN, said the Fed’s cautious stance comes as “inflation risks remain sticky, while pockets of consumer demand are proving resilient.” He noted China’s move to host sovereign gold reserves as part of a wider shift toward de-dollarisation, which could have implications for crypto as a global asset class.

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Meanwhile, ETF flows remain pivotal. Bitcoin ETFs saw $241m in net inflows on Wednesday, reversing prior outflows, while Ethereum ETFs continued to bleed with $79m in redemptions.