Hassan Maishera
TL;DR
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Bitcoin briefly dropped below $59,000, and other major cryptocurrencies slid late Thursday.
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The bearish performance comes as institutions reduce their exposure to the crypto market.
Bitcoin slides below key support amid risk-off sentiment
Bitcoin fell below the $59,000 level late Thursday as investors retreated from risk assets, with growing macroeconomic uncertainty and persistent outflows from U.S. spot Bitcoin exchange-traded funds (ETFs) weighing on the cryptocurrency market.
The world's largest cryptocurrency briefly dropped to around $58,200 before recovering to trade near $59,770 by early Friday, according to market data.
The broader crypto market also remained under pressure, with Ethereum falling 3.8% to approximately $1,555 and XRP declining 3.6% to around $1.03.
The decline came alongside a sharp sell-off in Asian equity markets, highlighting the increasingly close relationship between cryptocurrencies and traditional risk assets.
Investor sentiment weakened further after major Asian stock indexes posted steep losses on Friday.
South Korea's Kospi Index dropped more than 8%, triggering a market-wide circuit breaker, while Japan's Nikkei 225 fell 4.9%. Hong Kong's Hang Seng Index also declined 2.3%.
Min Jung, research associate at Presto Research, said Bitcoin continues to trade in line with global equities, making it vulnerable whenever broader financial markets move into a risk-off environment.
According to Jung, the selling pressure intensified during the Asian trading session as investors reduced exposure across multiple asset classes.
Analysts identify key Bitcoin support and resistance levels
Market analysts say Bitcoin's near-term direction will depend on whether it can reclaim the psychologically important $60,000 level.
Jeff Ko, chief analyst at CoinEx, said a swift recovery above $60,000 would help stabilize sentiment. However, if that level turns into resistance, traders are likely to focus on the next major support zone between $54,000 and $56,000.
Andri Fauzan Adziima, research lead at Bitrue Research Institute, shared a similar outlook, noting that investors are closely watching whether Bitcoin can maintain support between $58,000 and $59,000.
He added that market participants are also monitoring U.S. spot ETF flows and changing expectations for Federal Reserve interest rate policy, warning that volatility is likely to remain elevated until stronger market catalysts emerge.
Spot Bitcoin ETFs record largest outflow since May
Institutional sentiment also weakened as U.S. spot Bitcoin ETFs experienced another day of heavy withdrawals.
According to data from CoinGlass, the funds recorded net outflows of $691.70 million on Thursday, marking their largest single-day withdrawal since May 27 and extending the current streak of daily outflows to six consecutive trading sessions.
Dominick John, an analyst at Zeus Research, said investors remain focused on ETF fund flows, derivatives positioning, and upcoming U.S. economic data, including the July 2 jobless claims report, for clues about the market's next move.
Macroeconomic concerns have continued to weigh on both equity and cryptocurrency markets.
Recent U.S. inflation data showed that the Personal Consumption Expenditures (PCE) Price Index rose 4.1% year-over-year in May, while core PCE inflation increased 3.4%.
The stronger-than-expected inflation readings have reduced expectations for near-term monetary easing and kept the possibility of additional Federal Reserve policy tightening on the table.
Higher interest rates generally reduce investor appetite for speculative assets, including cryptocurrencies.
Analysts also pointed to concerns surrounding Strategy's STRC perpetual preferred stock as another factor affecting market sentiment.
The preferred shares fell to a record low on Thursday, trading as much as 26% below their $100 par value. Meanwhile, Strategy's common stock declined to its lowest level since February 2024 as Bitcoin prices weakened.
Jung said investors are closely monitoring developments surrounding Strategy alongside broader macroeconomic conditions.
Ko added that the decline has renewed questions about the sustainability of the company's payout structure and the long-term resilience of its business model.
With institutional fund outflows accelerating, inflation remaining elevated, and global equity markets under pressure, traders are expected to remain cautious until clearer macroeconomic and market catalysts emerge.
