A worsening macroeconomic climate and the collapse of industry giants such as FTX and Terra have weighed on bitcoin’s price this year.
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Bitcoin fell with the broader cryptocurrency market on Tuesday amid concerns about the global economy and lower summer liquidity.
The price of bitcoin was last lower by 3% at $64,680.44, according to Coin Metrics, dipping under $65,000 for the first time since May 16. Earlier in the day, it fell as low as $64,347.91. Ether lost 4% and was trading at $3,401.37.
Other cryptocurrencies suffered bigger declines. Ripple’s XRP was down by 6%, while Solana’s SOL token slid 7% and dogecoin tumbled 11%.
Bitcoin 1-month
“Oftentimes, when traders are unimpressed with how the economy or markets are performing they either sell at a discount to minimize their losses or exit riskier positions while they wait for uncertainty to clear up,” said Marko Jurina, CEO at Jumper.Exchange, a decentralized exchange (DEX) that lets users swap and bridge cryptocurrencies across blockchain networks.
“Today, we are likely seeing one or both of these scenarios play out,” Jurina added. “Economic conditions around the globe are weakening, geopolitical issues are far from resolution, and markets are thinner during the summer months. Given this perfect storm, moves will likely be parabolic in one direction or another, at least for the next few months, while many people are away from their desks on holidays and as the U.S. presidential election plays out.”
In equities, the tech heavy Nasdaq Composite fell 0.1% while the broad market S&P 500 was little changed following weak U.S. retail sales data for May. Coinbase shares were down 3%, while MicroStrategy dipped 1%.
Bitcoin has been wrestling with the $70,000 threshold since hitting its March 14 record of $73,797.68. It last tested that level at the beginning of June. It’s down 4% for the month and 9% for the quarter.
According to CryptoQuant, bitcoin’s downside may be limited, but there’s little evidence of bullish momentum right now. Its on-chain data suggests that traders have been reducing their holdings since bitcoin touched the $70,000 level in late May and are still not buying.