On Friday, Bitcoin dropped below $70,000 for the first time since August as inflation concerns and expectations of higher interest rates rattled the cryptocurrency market.

As the largest digital asset by market capitalization, Bitcoin fell as much as 4.4% intraday to $68,297, marking its lowest level since August 19. As of press time, it was trading at approximately $68,500.

Asian stock markets erased early gains driven by technology shares, while bond markets also declined, with investors adopting a cautious stance ahead of the release of U.S. producer price data.

The weakness in Bitcoin reflects the cumulative impact of macroeconomic pressures on the cryptocurrency market in recent weeks. Elevated oil prices and inflation levels have reinforced market expectations for further interest rate hikes by the Federal Reserve.

Additionally, the market widely expects that the Democratic Party will recapture control of both chambers of the U.S. Congress in next year's midterm elections, which has also sparked industry concerns about potentially stricter regulatory scrutiny.

This week, a key gauge of U.S. consumer prices rose significantly again in October, keeping the Federal Reserve on track for an interest rate hike next month. The core Consumer Price Index (CPI), which excludes food and energy, rose 0.3% month-over-month, exceeding market expectations for the third consecutive month. With costs across essential goods climbing comprehensively, the overall price index jumped 0.4% month-over-month.

Rich Rosenblum, co-founder of cryptocurrency market maker GSR, said that volatility in the artificial intelligence trading sector and the continued strengthening of the U.S. dollar have already washed out some bullish Bitcoin positions. Meanwhile, hot inflation data and leadership changes at Nvidia are also putting pressure on risk assets.

According to CoinGlass data, over $1.2 billion in cryptocurrency long bets were liquidated within 24 hours.