Key Points:
Bitcoin comes under immense pressure as global markets revel in risk aversion, notching its biggest weekly loss since the FTX exchange collapse in 2022. The cryptocurrency declined more than 10% before levelling off at $54,022 as of Monday. Bitcoin shed 22% over the last seven days, the most since the implosion of FTX. Ether and Dogecoin Plummeted Too.
The plunge was accompanied by a global stock sell-off, triggered by fears of a sputtering economy and doubts over the prospects of Artificial Intelligence-related investments. Geopolitical tensions fanned out in the Middle East, further unsettling the investors.
On 2nd August, Bitcoin exchange-traded funds in the United States saw their biggest outflows since May. Further, the digital asset changed hands below its 200-day moving average, which, according to Tony Sycamore, a market analyst at IG Australia Pty, forebodes a deeper pullback to $54,000.
Since hitting a record high of $73,798 in March, Bitcoin has experienced a number of negative pressures. Those may include shifting political winds in the US, with pro-crypto Republican Donald Trump battling for the presidency against Democratic Vice President Kamala Harris, who has not stated her stance on digital-asset policy.
Read more: Fed Interest Rate Steady At 5.25%-5.50%, High Odds For September Reduction
According to Bloomberg, the market faces potential sales of Bitcoin seized by governments and a supply overhang from tokens returned to creditors through bankruptcy proceedings. Bond traders also believe the odds of US interest rate cuts from September, starting with a supportive monetary policy to juice economic growth, have risen.
The turmoil in markets means there’s a strong possibility of a less restrictive monetary policy soon, potentially boosting cryptocurrency. Year-to-date gains in Bitcoin have moderated to about 25%, compared to an 18% rise in gold and a 9% increase in global stocks.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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