Bitcoin’s attempt to reclaim $70,000 earlier in the week lasted about 48 hours.
The largest cryptocurrency slipped to $65,735 in early Asian hours on Saturday, down 3% over the past day and 2.8% over the week. Wednesday’s rally, which edged closer to $70,000, has now given up more than half of its gains as overall risk sentiment deteriorated during Thursday and Friday’s U.S. sessions.
Altcoins have been hit harder. Solana fell 6.7%, ether 6.2%, dogecoin 5.1%, and XRP 4%. The losses pushed most major tokens into the red on a weekly basis, erasing the altcoin’s outperformance that had been the most encouraging signal of the week. BNB held up better than most, down just 2.5%.
The trigger was familiar. Friday’s US session saw the S&P 500 close down 0.4%, the Nasdaq 100 down 0.3% and the Dow Jones down 1.1%. Nvidia, still digesting its post-earnings reaction, lost another 4.2%.
A stronger-than-expected 0.5% rise in producer prices added fuel, signaling inflationary pressures that could prevent the Fed from cutting rates in the near future. Block Inc.’s mass layoffs have stoked broader concern that AI is starting to displace jobs in the economy rather than simply create them.
Crypto followed stocks lower, but as usual, with amplified magnitude. A 0.4% decline in the S&P turned into a 3% decline in bitcoin and a decline of more than 6% in altcoins. The leverage that came back into the system during Wednesday’s rally was eliminated when it returned to the downside.
The irony is that the institutional flow data this week was actually strong.
U.S. spot bitcoin ETFs added $1.1 billion in three days, putting them on track for their best week in months. But ETF inflows were not enough to overcome macroeconomic headwinds.
“Excessive analysis of short-term price movements is wrong,” Dom Harz, co-founder of Bitcoin finance company BOB, said in an email. “Bitcoin’s volatility comes as no surprise, especially to early investors who have experienced previous cycles. What’s different this time is the type of capital behind the emerging asset class.”
Meanwhile, CryptoQuant data shows that USDT stablecoin reserves on exchanges have fallen from $60 billion to $51.1 billion over the past two months, a drop that the company says could trigger a “mass sell-off” if reserves fall below $50 billion.
Elsewhere, Strategy shares top the list of large U.S. companies in short interest volume, as markets increasingly question the sustainability of the company’s debt-funded bitcoin buying program.
And on the Ethereum side, large holders began selling at a loss, with DAT company ETHZilla officially abandoning its ETH accumulation strategy and rebranding to instead focus on real-world tokenized assets.
Bitcoin is now back in the middle of the $60,000 to $70,000 range it has been stuck in since the February 5 crash. Wednesday proved that the top of this range is resistance. The question heading into March is whether the bottom still holds.
