Tech Rout and Oil Volatility Rattle Markets as Bitcoin Defends $60,000

U.S. spot Bitcoin ETFs, launched in January 2024, have become a crucial gateway for institutional capital and an increasingly important driver of short-term crypto prices. The latest divergence from equities was therefore notable: cooler U.S. inflation data lifted the S&P 500 and Nasdaq 100, but failed to draw buyers into Bitcoin, signaling that demand for digital assets remains fragile despite a more supportive macroeconomic backdrop.

U.S. spot Bitcoin ETFs recorded a combined $192 million of net outflows on Aug. 12 and 13, according to SoSoValue, their first two-day drawdown since late July. Bitcoin fell 1.14% on Aug. 14 to about $62,666, its lowest since Aug. 3, while Ether declined 0.73% to roughly $1,867. Bitcoin futures open interest rose more than 3% as prices fell and cumulative volume delta turned negative, indicating increasingly aggressive selling.

Bitcoin has traded increasingly like a macro-sensitive risk asset, leaving it vulnerable when energy prices and Treasury yields rise. Renewed U.S.-Iran hostilities and threats to shipping through the Strait of Hormuz have lifted crude prices, reviving inflation fears and reducing the scope for the Federal Reserve to ease policy. Higher yields also raise the opportunity cost of holding non-yielding assets such as Bitcoin, while tighter financial conditions pressure technology stocks and crypto markets alike.

Bitcoin fell 2.4% to $62,565 on July 13, breaking below $63,000 and its 200-week moving average, while Ether lost 2.5% and Brent crude jumped 4.4% above $79 a barrel. After a rebound, selling resumed: Bitcoin hit $64,799 on July 24 and slipped below $64,000 the next day as Brent topped $100. The U.S. two-year Treasury yield reached 4.31%, while CME Group data showed July rate-hike odds near 40%, up from about 12% a week earlier, ahead of the Fed's July 28-29 meeting.

Bitcoin, the world’s leading cryptocurrency, is widely viewed as a barometer for risk assets. A recent escalation in geopolitical conflict has pushed oil prices higher, while stress in Japan’s bond market and the prospect of selling by Strategy have heightened investor concerns about a renewed global regulatory crackdown. Together, these headwinds have put Bitcoin at risk of retesting a key psychological threshold. Whether that support holds will be an important signal for the broader digital asset market.

Geopolitical risks weighed on risk assets after former US President Donald Trump warned in mid-July that the United States would forcibly operate the blocked Strait of Hormuz. Bitcoin briefly fell below $62,000 on July 15 before testing support at $60,000. The latest data, however, showed signs that panic selling was stabilizing on July 16 as sellers’ profit margins fell to zero. The market is now watching closely to see whether Bitcoin can hold the $60,000 level.

As a non-yielding asset, Bitcoin is particularly sensitive to interest rates, the dollar and market liquidity. Federal Reserve Chair Kevin Warsh’s comments about persistent inflation briefly spurred demand for safe-haven assets. But rising Treasury yields, strong earnings from AI technology stocks and continued outflows from U.S. spot Bitcoin ETFs redirected capital toward fixed-income and equity markets.

A July 2 report showed Bitcoin climbing back above $60,000 on Wednesday, though it remained 53% below its all-time high. The five-year U.S. Treasury yield rose to 4.22%, while CME FedWatch put the probability of a rate increase by September 16 at 64%, up from 23% a month earlier. With the dollar index closing in on a one-year high, the market increasingly viewed a near-term advance to $65,000 as more difficult.

Bitcoin weakened even as global equities and AI stocks hit record highs, reflecting a shift in capital toward technology shares and cooling institutional demand. U.S. spot Bitcoin ETFs had been a major source of buying in the current rally, while Strategy, formerly MicroStrategy, has long been viewed as a bellwether for corporate Bitcoin holdings, making its moves influential for market confidence. Reports describing these developments as “recent” did not provide an exact calendar date.

Bitcoin first fell below $66,000 this week before briefly retreating to around $62,400. Other reports said it later lost the $60,000 level, triggering more than $1.5 billion in forced liquidations across the crypto market. U.S. spot ETFs recorded net outflows for 11 consecutive days, totaling about $3.5 billion. Strategy reduced its holdings for the first time since the end of 2022, with the market’s excess supply estimated at $4.4 billion.

The $60,000 level is more than a psychological round-number threshold. Deribit Chief Commercial Officer Jean-David Péquignot said most ETF buyers, whales and short-term traders who entered the market over the past year have cost bases between $60,000 and $67,000. The strike also has $1.2 billion in open put interest, and a break below it could force market makers to sell for hedging purposes and trigger leveraged liquidations.

U.S. spot Bitcoin ETFs recorded net inflows of $3.05 million on June 5, ending a 13-day streak of outflows totaling $4.4 billion. BlackRock's IBIT attracted $47.66 million. Ether ETFs took in $19.3 million, all through ETHA, ending a 17-day outflow streak. Bitcoin fell as low as $59,060 on June 24, leaving support on uncertain footing.

Bitcoin's latest decline was triggered by an escalation in the war involving Iran, new U.S. government tariff policies and a stronger yen, with risk assets coming under pressure across the board. The cryptocurrency market has lost about $2 trillion in value, reflecting a marked retreat in capital and liquidity. The $60,000 level is both a technical support zone and a key psychological threshold, making it central to whether the selloff deepens.

Bitcoin recently fell below $65,025, initially triggering more than $430 million in long liquidations. As the price moved closer to $60,000, long liquidations swelled to more than $600 million. Crypto liquidations across the market exceeded $1.1 billion at one point over 24 hours, affecting nearly 200,000 traders. Traders had estimated a 53% chance that Bitcoin would fall below $66,000 by April 24, while the market also saw about $1 billion in put-option bets at the $60,000 level.

Bitcoin is highly sensitive to interest rates and risk appetite. Conflict in the Middle East and the Strait of Hormuz crisis have driven up oil prices and inflation concerns, while rising U.S. Treasury yields have pushed capital toward safe-haven assets such as the dollar. The latest decline has also affected liquidity across the broader cryptocurrency market.

As of July 19, Bitcoin had fallen about 3% over 24 hours, dropping below $67,000 and touching a two-week low. The U.S. 10-year Treasury yield approached 4.5%, near a one-year high, while about $300 million in long positions were liquidated. Core Scientific separately sold $175 million worth of Bitcoin and plans to redirect the proceeds into AI data centers and high-performance computing operations.

Bitcoin is highly sensitive to interest rates and market liquidity. The U.S. Federal Reserve delivered its most hawkish signal in years through the Federal Open Market Committee, while the U.S.-Iran conflict increased energy and inflation risks. Investors responded by retreating from risk assets including cryptocurrencies, as oil prices climbed to their highest level since 2022.

Market analysis on May 18 showed Bitcoin falling below $76,000 and approaching $75,000, with some traders predicting a possible decline to $65,000. Recent buyers sold $770 million worth of BTC at a loss, reflecting how high oil prices, hawkish monetary policy and geopolitical tensions continue to suppress demand.

Bitcoin and risk assets such as U.S. stocks are highly sensitive to the outlook for U.S. interest rates. A hotter-than-expected Producer Price Index from the U.S. Labor Department pushed back market expectations for Federal Reserve rate cuts. Persistent bond-market concerns over inflation and broader economic risks drove capital toward safe-haven assets such as gold, putting cryptocurrencies under selling pressure.

Bitcoin initially fell to about $65,000 in a weekend sell-off, while Solana, XRP and Dogecoin each dropped about 6%. Although Bitcoin and U.S. stocks briefly stabilized afterward, the cryptocurrency failed to hold above $66,000. Market analysis remained cautious on March 27, with Bitcoin holders' unrealized losses estimated at $600 billion. Only some AI-related tokens continued to attract buying interest.