The cryptocurrency market has ended the week on a downward note: Bitcoin has once again fallen below the psychological $60,000 mark, Ether approached $1,550, whilst most major altcoins traded under pressure amid capital outflows from crypto ETFs, hawkish expectations regarding Fed interest rates and a strengthening US dollar.
As of Thursday and Friday, Bitcoin was trading at around $59,200, having fallen by approximately 3% over the past 24 hours. The intraday low was around $58,200. Ether fell to $1,550, losing around 5.5% over the day, whilst Solana held steady at around $68–69.
The week saw a continuation of June’s weak performance. At the start of the month, Bitcoin was trading above $70,000, but the market subsequently faced a number of negative factors: record or near-record outflows from US spot Bitcoin ETFs, the growing appeal of shares in artificial intelligence-related companies, the strengthening of the US dollar, and deteriorating sentiment surrounding major corporate holders of Bitcoin.
This week, the pressure intensified following another drop in Bitcoin’s price below $60,000. CoinDesk noted that the cryptocurrency’s decline is occurring even against a backdrop of periodic gains in other risky assets, as capital continues to flow into the technology and AI sectors of the stock market. According to CoinDesk, Deutsche Bank attributed Bitcoin’s fall below $60,000 to the Fed’s more hawkish rhetoric, outflows from ETFs and concerns regarding companies with high exposure to Bitcoin.
Ethereum has also failed to act as a safe-haven asset in the crypto market. Trading at around $1,550, the second-largest cryptocurrency by market capitalisation remains under pressure alongside the broader market. The decline in ether suggests that investors are currently reducing their exposure to crypto assets as a whole, rather than just Bitcoin.
Solana appeared somewhat more stable throughout the day, though the overall backdrop for altcoins remains weak. When Bitcoin falls below key levels, investors typically reduce their positions in riskier tokens more quickly than in the market’s core assets.
The performance of spot Bitcoin ETFs in the US remains a separate factor. In June, the market had already experienced several waves of outflows from funds that had previously been one of the main sources of demand for Bitcoin. When ETFs cease to support the market through inflows, Bitcoin becomes more sensitive to macroeconomic indicators, yields, the US dollar and overall risk appetite.
Globally, cryptocurrencies are now competing for capital not only with traditional assets but also with the artificial intelligence (AI) sector. Reuters previously noted that investors are increasingly reallocating funds towards AI-related shares and anticipated major IPOs, whilst Bitcoin is experiencing one of its weakest starts to the year in the last decade.
Until the end of the week, the key technical level for Bitcoin remains the $58,000–$60,000 range. Holding within this range could give the market a chance to stabilise, but a sustained move below $58,000 would reinforce expectations of a further decline. In this scenario, the next level to watch could be $55,000, which some analysts view as a potential level for a local bottom to form.
The base-case scenario for the coming days is heightened volatility and cautious attempts at stabilisation following the sharp decline. A sustained market recovery will require a combination of several factors: an end to outflows from ETFs, a weaker US dollar, a softening of expectations regarding Fed interest rates, and a return of risk appetite for crypto assets.
For the time being, the crypto market remains in ‘defensive trade’ mode: investors prefer to reduce their exposure, cut their losses or wait for new signals from ETF flows and the US macroeconomy.