Crypto markets fall as Bitcoin hits five-week low
Investors turn cautious as West Asia tensions, rising yields and weaker sentiment weigh on cryptocurrency markets
Bitcoin fell to its lowest level in more than five weeks on Thursday as growing concerns over the global economic outlook and sustained outflows from US exchange-traded funds (ETFs) put pressure on the cryptocurrency market.
The world’s largest digital asset dropped as much as 1.5 per cent to $74,017 in Singapore trading, marking its weakest level since 20 April, moneycontrol reported. Ether, the second-largest cryptocurrency by market value, also declined by more than 2 per cent.
Analysts said investor sentiment has been shaken by fears that the ongoing conflict involving the United States and Iran could drive inflation higher and potentially force central banks to keep interest rates elevated for longer.
The decline in cryptocurrencies came despite strong performances in global equity markets, where investor optimism around artificial intelligence has helped major indices scale record highs.
Market participants also pointed to continued withdrawals from US spot-Bitcoin ETFs as a major factor behind the sell-off. Data showed the funds have recorded net outflows of roughly $1.5 billion so far in May.
Sean McNulty, Asia-Pacific derivatives trading lead at FalconX, said the weakness in Bitcoin appeared to be driven more by broader macroeconomic concerns than by issues specific to the crypto industry.
According to McNulty, rising US bond yields and a stronger dollar have tightened financial conditions, while reports of a large block sale linked to the iShares Bitcoin Trust — the world’s largest Bitcoin ETF — further dampened investor confidence.
Tony Sycamore, market analyst at IG Markets, said traders were adopting a more defensive approach as they waited for clearer developments in the Middle East.
He added that cryptocurrencies were also coming under pressure as equity markets showed signs of losing momentum.
“With stock markets beginning to look fatigued, Bitcoin is feeling the strain as leveraged long positions are reduced following the break below key support levels around the mid-$70,000 range,” Sycamore said.
He warned that near-term risks for the cryptocurrency market remain skewed to the downside.