Bitcoin’s attempt to recover $70,000 earlier this week lasted about 48 hours.
The biggest cryptocurrency fell to $65,735 in early Asian hours on Saturday, down 3% over the past day and 2.8% on the week. Wednesday’s rally, which came within touching distance of $70,000, has now given back more than half of its gains as broader risk-on sentiment worsened through Thursday and Friday’s US sessions.
Altcoins were hit harder. Solana fell 6.7%, ether fell 6.2%, dogecoin fell 5.1%, and XRP lost 4%. The losses pushed most major tokens into the red on a weekly basis, erasing the altcoin outperformance that had been the most encouraging signal of the week. BNB held up better than most, down only 2.5%.
The trigger was familiar. Friday’s US session saw the S&P 500 close up 0.4%, the Nasdaq 100 down 0.3% and the Dow down 1.1%. Nvidia, still digesting its post-earnings reaction, fell another 4.2%.
A warmer-than-expected 0.5% jump in producer prices added fuel, signaling inflationary pressures that may keep the Fed from cutting interest rates anytime soon. Block Inc.’s massive layoffs fueled broader fears that artificial intelligence is beginning to displace jobs across the economy rather than simply create them.
Crypto followed stocks lower, but as usual with amplified size. A 0.4% drop in the S&P turned into a 3% drop in bitcoin and a more than 6% drop in altcoins. The leverage that reentered the system during Wednesday’s rally was washed out on the way back down.
The irony is that the institutional flow data this week was actually strong.
US spot bitcoin ETFs added $1.1 billion in three days, putting them on pace for their best week in months. But ETF inflows have not been enough to overcome the broader macro headwinds.
“Over-analyzing short-term price movements is misguided,” Dom Harz, co-founder of bitcoin finance firm BOB, said in an email. “Bitcoin’s volatility is no surprise, especially to early investors who have experienced previous cycles. What is different this time is the type of capital behind the new asset class.”
Meanwhile, CryptoQuant data shows that USDT stablecoin reserves on exchanges have fallen from $60 billion to $51.1 billion over the past two months, a drop that the firm warned could trigger a “massive sell-off” if reserves fall below $50 billion.
Elsewhere, Strategy shares topped the list of major U.S. companies with short interest volume as markets increasingly questioned the sustainability of the firm’s debt-financed bitcoin acquisition program.
And on the Ethereum side, major holders have started selling at a loss, with DAT company ETHZilla officially abandoning its ETH accumulation strategy and rebranding to focus instead on real-world tokenized assets.
Bitcoin is now back in the mid-$60,000-$70,000 range that it has been stuck in since the February 5 crash. Wednesday proved that the top of that area is resistance. The question heading into March is whether the bottom will still hold.
