Key facts
- Bitcoin slipped below $65,000, failing to hold the level for a fourth consecutive day.
- Ether and XRP experienced the largest declines among major cryptocurrencies.
- Analysts suggest that clearing $70,000 could significantly shift market sentiment.
- Broader market sentiment is being influenced by rising bond yields and oil prices.
- U.S. inflation data is scheduled for release, impacting assets sensitive to interest rate expectations.
Bitcoin experienced a dip below $65,000 on Tuesday, marking its fourth unsuccessful attempt to hold above this significant level. The cryptocurrency remained slightly higher on the week despite a generally weak sentiment across the digital asset market. Ether and XRP were among the major tokens leading the declines, while Solana and BNB managed to hold onto weekly gains. Hyperliquid's HYPE, Tron, and Dogecoin also saw modest increases.
Analysts suggest that the repeated testing of the $65,000 level without substantial buying indicates a build-up of short positions above this price point. The next critical level to watch is $70,000, which is also near Bitcoin's 200-day moving average. According to Alex Kuptsikevich, chief market analyst at FxPro, surpassing this level would signify a move above the trading range seen in March and April, potentially shifting market sentiment significantly.
Currently, the crypto sentiment index stands at 30, indicating a 'fear' zone, a state that has persisted since mid-July. Broader market dynamics are also influencing crypto sentiment, with U.S. 10-year Treasury yields rising to 4.71% and Brent crude oil holding steady at $87.73 a barrel after a substantial jump. These factors, coupled with upcoming U.S. inflation data, are weighing on assets that typically perform better in environments where rate hikes appear less likely.
Fund flows into U.S. spot Bitcoin funds had been positive until this week, with $865 million invested across five sessions ending August 7. However, a provisional outflow of $91 million was recorded on Monday.