On Friday, Bitcoin's price continued its downward trajectory, falling below the critical psychological threshold of $60,000 for the first time since October 2024. Against a backdrop of escalating risk-off sentiment in global markets, cryptocurrencies faced substantial selling pressure, with Bitcoin's cumulative weekly loss exceeding 16%.
As of midday Friday Eastern Time, Bitcoin was trading around $59,000, marking a decline of over 6% within 24 hours. Ethereum mirrored this weakness, dropping more than 10% to approximately $1,580. Data from Coinglass indicates that over the past 24 hours, total cryptocurrency liquidations across the market surpassed $1.5 billion, affecting more than 300,000 traders, with long positions accounting for over 80% of these liquidations.
Key Drivers of the Decline
This round of selling pressure was triggered by several key factors. Firstly, heightened expectations for Federal Reserve interest rate hikes emerged as the most significant headwind. With U.S. May non-farm payroll data significantly exceeding forecasts, market bets on a rate hike before year-end have risen notably, leading to an immediate sell-off in higher-risk crypto assets. Secondly, capital has been persistently exiting cryptocurrency ETFs. Bloomberg data shows that U.S. spot Bitcoin ETFs have recorded net outflows for 13 consecutive trading days, with cumulative outflows nearing $4.4 billion, marking the longest streak of withdrawals since their launch in early 2024. During the same period, spot Ethereum ETFs also saw 17 consecutive days of net outflows.
Thirdly, the AI investment boom is drawing capital away from the market. As AI-related stocks like NVIDIA Corp (NASDAQ: NVDA) and Microsoft Corp (NASDAQ: MSFT) continue to hit new highs, global capital is rapidly concentrating in this sector, making cryptocurrencies one of the primary assets being reduced. The head of digital assets research at Charles Schwab noted that investors are selling less favored assets to allocate funds to the most effective trades currently available.
Market Sentiment and On-Chain Data
On-chain data suggests the market is exhibiting signs of capitulation selling. Over 50% of Bitcoin's supply is currently held at an unrealized loss, with daily realized losses having spiked to around $1.3 billion, of which long-term holders contributed approximately 59%. Data from Santiment indicates market sentiment has plummeted from extreme optimism in late May into negative territory.
Outlook and Analyst Perspectives
Regarding the future price path, Geoffrey Kendrick, head of global digital assets research at Standard Chartered, maintains his view that Bitcoin could reach $100,000 by year-end, reasoning that the bulk of the selling pressure may have already passed. However, other analysts warn that if the $60,000 support level is decisively broken, it could trigger more extensive technical selling, with the next line of defense potentially around $55,000.
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