Bitcoin has recently experienced another decline, falling below the $108,000 mark as its volatile trajectory continues. This downward trend coincides with escalating trade tensions between the U.S. and China, prompting investors to become more risk-averse. The current climate of uncertainty regarding global affairs is influencing cryptocurrency markets’ direction as analysts anticipate a shift in focus towards macroeconomic events.
CoinMarketCap data reveals Bitcoin dipping by 2.6% over the past 24 hours, reaching $107,854. After briefly exceeding $111,200 on Monday, the crypto market witnessed renewed selling pressure. Jeff Mei, Chief Operating Officer of BTSE, emphasizes that this market volatility is directly fueled by macroeconomic concerns, stating “As long as trade tensions between the U.S. and China persist, volatility will remain high.”
These fears are linked to upcoming meetings where leaders from both countries could potentially agree to de-escalate the conflict, but experts suggest a complete resolution seems unlikely. This expectation has led to cautious market positioning.
Across the altcoin landscape, Ethereum, BNB, and Solana also experienced declines.
Ethereum lost 4.77% to $3,855, while BNB dropped 5.36% to $504, and Solana slumped 4.26% to $172.
Furthermore, crypto spot ETF outflows contributed to the market’s weakness. According to SoSoValue data, Bitcoin ETFs witnessed a net outflow of $40.5 million, and Ethereum ETFs recorded $145.7 million in outflows, adding to last week’s record weekly outflow of $1.23 billion. This trend aligns with the market’s current pessimism as per The Block’s Fear and Greed Index, which stood at 29, indicating a significant amount of fear. Jeff Mei cautions that “The unpredictable nature of macro developments poses the biggest risk to crypto markets. Diversification and hedging strategies should be considered by investors.”
Current market attention is focused on consumer price index data release scheduled for Friday and potential 25 basis point rate cuts by the Federal Reserve, which has a high probability of being implemented (98.9% according to CME Group’s FedWatch Tool).