Bitcoin falls below $110,000 as 'cautious tone' sweeps over market

Market Overview - Bitcoin (BTC) fell below $110,000, declining over 3%, while Ethereum (ETH) dropped approximately 5% to below $3,900, marking its lowest level since August [1][2] - The broader crypto market experienced significant sell-offs, with over $1.6 billion in long positions liquidated earlier in the week and an additional $511 million liquidated in the past 24 hours [3] Market Sentiment - The downward pressure on prices is attributed to insufficient buying power and a wave of liquidations, which has weakened market sentiment [2] - The decline in crypto prices coincides with corrections in the broader equity market, raising investor concerns about market frothiness driven by AI enthusiasm and uncertainty regarding the Federal Reserve's interest rate path [3] Seasonal Trends - September is noted as a seasonally volatile month for crypto, with the last three months of the year typically providing tailwinds for the market [4] Liquidity Factors - The U.S. Treasury has been refilling its General Account by issuing T-bills and bonds, which acts as a liquidity drain for crypto markets, potentially reducing demand for risk assets like Bitcoin [5] - The decline in crypto prices has also affected crypto-related stocks, with trading platforms like Robinhood and Coinbase each declining over 1% [5]