Bitcoin slumped to a more than one-month low amid signs of fatigue in its record-breaking rally earlier this year. After peaking at nearly $74,000 in March, driven by optimism over the potential approval of US exchange-traded funds (ETFs) directly holding the crypto, Bitcoin has since retreated approximately 14%. This decline coincides with fluctuating expectations for US interest rate cuts, which have dampened demand for riskier assets.
Bitcoin dip continues
“Cryptocurrencies have had their wings clipped by the sell-off in equity markets, reflecting a downturn in risk appetite in global finance,” said Alex Kuptsikevich, a senior market analyst at FxPro, in a note on Friday.
Bitcoin dropped as much as 2.4% to $63,490, marking its lowest level since May 15. The cryptocurrency is down about 3% since last Friday. Other major cryptocurrencies, including Ether, XRP, Cardano, and Solana, saw marginal declines of around 1% or less.
“The bull run over the past few quarters has lost momentum and is in danger of failing,” commented Fiona Cincotta, a senior financial markets analyst at City Index. “Given Bitcoin’s finite supply, it is considered a hedge against inflation, but with inflation cooling globally back to normalized levels, Bitcoin is coming under pressure.”
Bitcoin’s gradual decline over recent weeks accelerated on Friday, with the price falling more than 3% in the past 24 hours to around $63,700. This marks a 9% decline over the past month. Despite this downturn, contrarian bulls might find solace in indicators tracked by analysis firm Santiment, which suggest that crowd sentiment towards Bitcoin has been extremely negative for four weeks.
What does Sentiment says?
“The crowd is mainly fearful or disinterested toward Bitcoin,” Santiment noted in a post on X. “This extended level of fear, uncertainty, and doubt (FUD) is rare, as traders continue to capitulate,” they added. “BTC trader fatigue, combined with whale accumulation, generally leads to bounces that reward the patient.”
Santiment’s Weighted Sentiment Index, which measures Bitcoin mentions on X and compares the ratio of positive to negative comments and trading volumes, showed a -0.73 reading as of Friday. The index has been negative since May 23.
