Bitcoin’s price fell to $65,735 during early trading hours on Saturday, marking a 3% decline over the past day and a 2.8% drop for the week. This decline follows a brief rally earlier in the week when the cryptocurrency approached $70,000, only to lose most of those gains as risk sentiment deteriorated in the broader market.
Altcoins faced even steeper declines. Solana fell by 6.7%, Ethereum decreased by 6.2%, Dogecoin dropped 5.1%, and XRP lost 4%. These losses reversed much of the previous week’s positive momentum among alternative cryptocurrencies. In contrast, Binance Coin (BNB) experienced a milder decline of 2.5%.
The downturn coincided with a negative performance in U.S. equity markets on Friday, where the S&P 500 closed down 0.4%, the Nasdaq 100 fell by 0.3%, and the Dow Jones Industrial Average dropped 1.1%. Nvidia, still reeling from a disappointing earnings report, saw its stock decline by 4.2%.
A surprising 0.5% increase in producer prices for January contributed to the negative sentiment, raising concerns about persistent inflation that could hinder the Federal Reserve’s ability to lower interest rates in the near future. Additionally, significant layoffs at Block Inc. heightened fears that artificial intelligence might be displacing jobs across various sectors.
Cryptocurrency markets typically react more dramatically than traditional equities. A 0.4% decline in the S&P 500 translated into a 3% drop for Bitcoin and over a 6% decrease for altcoins. The leverage that had re-entered the crypto market during the midweek rally was largely wiped out as prices fell.
Despite the recent price drop, institutional interest in Bitcoin remains robust. U.S. spot Bitcoin exchange-traded funds (ETFs) recorded inflows of $1.1 billion within three days, indicating strong demand. However, these inflows have not been sufficient to counteract the prevailing macroeconomic challenges.
“Over-analysis of short-term price movements is misguided,” said Dom Harz, co-founder of Bitcoin finance firm BOB. “Bitcoin’s volatility is no surprise, particularly for early investors who have experienced previous cycles. What’s different this time is the type of capital behind the emerging asset class.”
Data from CryptoQuant indicates a significant decline in USDT stablecoin reserves on exchanges, which have dropped from $60 billion to $51.1 billion over the past two months. Analysts have warned that a further decline below $50 billion could trigger a substantial sell-off in the market.
In other developments, Strategy has emerged as a focal point among large U.S. companies with high short interest, raising questions about the sustainability of its debt-funded Bitcoin acquisition strategy. On the Ethereum front, large holders have begun selling at a loss, with the company ETHZilla officially abandoning its accumulation strategy in favor of focusing on tokenized real-world assets.
Currently, Bitcoin is trading within the $60,000 to $70,000 range that has persisted since the market crash on February 5. The recent peak near $70,000 has established a resistance level, while market participants are left to ponder whether the lower boundary will hold as March approaches.
Bitcoin's recent decline to $65,735 reflects broader market pressures, including disappointing economic data and heightened inflation concerns. Altcoins experienced steeper losses, reversing earlier gains as institutional interest remains strong but insufficient to counteract macroeconomic challenges.