Bitcoin Recovers Amid Global Market Sell-Off and Geopolitical Tensions

Bitcoin Sees Reversal Amid Global Market Sell-Off

In the early hours of Friday in Asia, Bitcoin (BTC) made a notable recovery from recent losses, even as a widespread sell-off in global financial markets persisted into its third consecutive day this week. This market turmoil has been further intensified by escalating geopolitical tensions in the Middle East.

On Thursday, BTC experienced a significant drop, plummeting to a low of $62,500 during late U.S. trading hours. However, it managed to rebound slightly, trading just below $64,000 at 6:30 UTC. This price point is crucial as it aligns closely with the 50-day moving average, which serves as an important tactical support level for many traders.

Alex Kuptsikevich, a senior market analyst at FxPro, shared insights with CoinDesk, stating, “If the decline continues, the dynamics around the $63K and $61K levels will be critical, as these are near the 50 and 200-day moving averages. A failure to hold this support could potentially lead to a drop to $55K, which would be quite alarming.”

Historically, August has proven to be a challenging month for Bitcoin. Over the past 13 years, the cryptocurrency has concluded the month positively only five times, while experiencing declines in eight instances. On average, Bitcoin has seen a decline of 15.4% during this month, with an average increase of 26% in the years it performed well.

Furthermore, other major cryptocurrencies have also faced losses in the past 24 hours, reflecting weakness in broader global equities. Ether (ETH) declined by 1.6%, while prominent tokens such as XRP and Solana’s SOL fell by as much as 8%. The CoinDesk 20 (CD20), a comprehensive index that tracks the largest tokens by market capitalization, excluding stablecoins, decreased by 2.44%.

This widespread downturn in Bitcoin was mirrored in several Bitcoin exchange-traded funds (ETFs). Despite U.S.-listed BTC ETFs experiencing a total daily net inflow of $50.6 million, other funds including GBTC, FBTC, ARKB, BITB, and HODL reported outflows.

In contrast, Ether ETFs collectively saw a net inflow of $26.75 million, although many of these funds did not register any inflow at all.

The technology-heavy Nasdaq 100 index concluded Thursday with a notable loss of 2.6%, while the S&P 500 Index dropped by 1.4%, nearly erasing all of its gains from Wednesday, which had been 1.6%. These declines have been fueled by growing concerns regarding the U.S. economy and the forthcoming earnings reports of technology companies.

In Asia, Japan’s Topix index experienced a significant decline of 6% on Friday, marking its largest drop since 2016.

Additionally, Presto Research highlighted the remarkable performance of Microstrategy (MSTR) in the second quarter of 2024. This was attributed to a 3.7% increase in BTC per share through what they termed “intelligent leverage,” alongside a planned $2 billion equity offering aimed at acquiring more BTC. Furthermore, the expected adoption of fair-value accounting for BTC by the first quarter of 2025 is anticipated to benefit the broader Bitcoin market.

As of now, MSTR has seen a year-to-date increase of 118%, while Bitcoin has risen by 45%, according to data from CoinDesk Indices.