Bitcoin fell below $110,000 on Friday, heading for a sharp weekly loss as the market braced for the expiration of nearly $22 billion in crypto options, while investors remained cautious ahead of key US inflation data.

The world’s largest cryptocurrency dropped 1.8% to trade at $109,552.6 by 02:20 AM ET (06:20 GMT), after earlier slipping below $109,000 — its lowest level in six weeks.

Bitcoin is on track for a weekly decline of more than 5%, with other altcoins also poised for heavy weekly losses.

Bitcoin falls ahead of massive options expiry

The expiry of options contracts scheduled for 08:00 GMT on Friday marks the end of the third quarter, placing downward pressure on Bitcoin and other digital assets.

According to derivatives exchange Deribit, more than $17 billion worth of Bitcoin options were set to expire, with a large portion of open interest concentrated in bullish contracts.

Reports indicate that such large expirations can exacerbate price volatility, especially if key support levels fail to hold.

Earlier in the week, Bitcoin’s slide was attributed to a wave of liquidations in derivatives markets, which erased nearly $1.5 billion from crypto markets. Reports noted that selling intensified as traders maintained directional bets through options contracts that benefit from sharp moves, underscoring the market’s ongoing volatility.

Fed outlook in focus; PCE inflation data awaited

Meanwhile, recent US economic data reduced expectations for aggressive Federal Reserve rate cuts.

Second-quarter GDP growth was revised up to an annualized 3.8% on Thursday, fueling speculation that the central bank may adopt a more cautious stance toward monetary easing.

Investors now await the release of the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, for additional signals on monetary policy direction.

TeraWulf plans $3 billion data center expansion

TeraWulf Inc. (NASDAQ: WULF) plans to raise about $3 billion to finance data center expansion through a financing structure backed by Google (NASDAQ: GOOGL), CFO Patrick Flury told Bloomberg.

The Bloomberg report added that Morgan Stanley is arranging the potential deal for TeraWulf, noting it could be executed via high-yield bond markets or leveraged loans.

Oil prices rose on Friday, heading for weekly gains of more than 4%, after Ukrainian attacks on Russian energy infrastructure prompted Moscow to cut fuel exports.

Brent crude futures gained 13 cents, or 0.2%, to $69.55 a barrel by 09:10 GMT, while US West Texas Intermediate (WTI) rose 16 cents, or 0.3%, to $65.14.

Tamas Varga, an analyst at PVM, said: “The geopolitical risk premium, which had been building over the past two months as Ukraine intensified its drone attacks, has now translated into an actual supply shortfall, hurting Europe, which is structurally short of middle distillates.”

Both benchmarks are on track for their biggest weekly gains since mid-June.

Russian Deputy Prime Minister Alexander Novak announced on Thursday that Russia would impose a partial ban on diesel exports until the end of the year and extend the existing ban on gasoline exports.

Reduced refining capacity has already left several Russian regions facing shortages of certain fuel grades.

Daniel Hynes, an analyst at ANZ Bank, noted that NATO’s warning of a response to any further violations of its airspace has heightened tensions stemming from the war in Ukraine, raising the likelihood of additional sanctions on Russia’s oil industry.

On the supply side, two Iraqi oil ministry officials told Reuters on Thursday that oil flows from Iraq’s Kurdistan region to Turkey would resume on Saturday.

Capping some of the gains, the US Commerce Department reported that GDP rose at an upwardly revised annualized pace of 3.8% in the last quarter, according to the latest figures from the Bureau of Economic Analysis released Thursday.

Stronger-than-expected economic data could make the Federal Reserve more cautious about continuing to cut interest rates, after last week’s 25-basis-point reduction — its first since last December.

The dollar held steady against the euro and the British pound on Friday, maintaining strong gains as investors awaited US consumer spending data, after growth figures came in better than expected, reducing expectations for further Federal Reserve easing this year.

The euro traded near a three-week low at $1.1669, while the pound stabilized at $1.3347 after hitting its lowest in nearly two months on Thursday. The yen traded at an eight-week low after US President Donald Trump announced a new package of tariffs, including a 100% tax on branded pharmaceuticals, 25% on heavy trucks, and 50% on kitchen cabinets.

Limited reaction in currency markets on expectations of exemptions

Shares of major European pharmaceutical companies steadied after an early drop, as analysts noted that exemptions for firms building factories in the United States could mean the impact will be limited for regional giants such as Roche and Novo Nordisk.

Nick Rees, head of macroeconomic research at Monex Europe, said: “It’s not surprising to see the limited reaction in currencies, as markets have already been through several rounds of such measures and tend to view the announcements as positioning by the White House.” He added that bilateral trade deals several countries signed with the Trump administration were not as destabilizing as initially feared, easing market sensitivity.

The dollar index, which measures the US currency against a basket of major peers, was heading toward its biggest weekly gain in two months, after US data on growth, jobless claims, durable goods, and wholesale inventories all exceeded expectations on Thursday.

Rate-cut bets shrink

Attention now turns to the release of US consumer spending data later on Friday for further clues on whether the economy needs additional Fed stimulus.

According to the CME FedWatch tool, investors are now pricing a 12% chance of no rate change next month, up from 8.1% the previous day. Total easing priced in by year-end has also declined to less than 40 basis points.

On Thursday, the US Commerce Department reported that GDP growth was revised up to 3.8% for April through June, compared with an initial estimate of 3.3%. Economists polled by Reuters had not expected this upward revision. The Personal Consumption Expenditures (PCE) price index — the Fed’s preferred inflation gauge — is expected to show a 0.3% monthly rise in August and a 2.7% annual increase, according to a Reuters survey.

Bansi Madhavani, senior economist at ANZ, said: “At a time when Fed members are concerned about high inflation, we think such a report would be encouraging.” She added that as long as monthly inflation data continue to signal an upward trend, “we expect the Fed to continue gradual easing with 25-basis-point cuts.”

In Japan, where the central bank is pursuing monetary tightening, data showed Tokyo core inflation in September remained above the 2% target, keeping expectations for an imminent rate hike alive.

In cryptocurrency markets, Bitcoin rose 0.4% to $109,639.28, while Ether gained 1.3% to $3,939.60.

Gold prices rose in the European market on Friday, extending gains for a second straight day and trading near all-time highs, on track for a sixth consecutive weekly advance, supported by the US dollar’s pause against a basket of major currencies.

With Federal Reserve officials striking a more cautious tone and strong US economic data released, the probability of an October rate cut has declined.

To reprice those expectations, investors later today await the US Personal Consumption Expenditures (PCE) report, the Fed’s preferred inflation gauge.

Price Overview

• Gold prices rose by about 0.2% to $3,755.24, from an opening level of $3,749.39, after touching a low of $3,734.58.

• On Thursday, gold settled up 0.35%, resuming gains after a pause the previous day on profit-taking and corrections from the all-time high of $3,791.13 an ounce.

Weekly Trading

Over the course of this week, which officially ends at today’s settlement, gold prices are up about 1.9%, on track for a sixth straight weekly gain, the longest winning streak since late December 2024.

US Dollar

The dollar index fell about 0.1% on Friday, retreating from a three-week high of 98.61 points, reflecting a pause in the US currency’s advance against a basket of global peers.

Beyond profit-taking, the US dollar has retreated in a narrow range as investors avoided building new long positions ahead of the release of the monthly PCE report.

US Interest Rates

• Fed Chair Jerome Powell said on Tuesday that the central bank will continue to balance concerns about a weakening labor market with mounting worries over inflation.

• Data on Thursday showed that the US economy grew in the second quarter at its fastest pace in more than two years, beating market expectations, while jobless claims fell sharply last week.

• Following the comments and data, and according to the CME FedWatch tool, the probability of a 25-basis-point rate cut in October fell from 92% to 88%, while the probability of holding rates steady rose from 8% to 12%.

• To reprice those expectations, investors later today await the August PCE report, heavily relied on by the Fed to gauge inflation trends.

Gold Outlook

Tim Waterer, chief market analyst at KCM Trade, said that the dollar’s normalization represents a potential barrier for gold and its bid to reach $3,800.

He added that US President Donald Trump’s recent announcement of new tariffs may limit any immediate downside for gold prices.

Waterer also explained that gold is trading somewhat sluggishly, with traders hesitant to buy the precious metal with real conviction, fearing that the core PCE report, even slightly, could mirror the rise in GDP readings.

SPDR Fund

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were unchanged on Thursday, with the total standing at 996.85 metric tons.