Bitcoin fell below the $77,000 level over the weekend due to strong selling pressure, spooking investors. Analysts blamed the decline on rekindled tensions between the U.S. and Iran, rising inflation concerns and rising bond yields.
According to market data, Bitcoin fell by 1.2% in the past 24 hours to $76,707. The leading cryptocurrency hit an intraday low of $76,720, but had recently rallied to $82,000 on strong inflows to the Spot Bitcoin ETF and optimism surrounding the U.S. Cryptocurrency Regulation CLARITY Act bill. However, recent developments have significantly weakened the market’s risk appetite.
US President Donald Trump’s harsh comments on Iran triggered the sell-off. President Trump has threatened military intervention if peace negotiations continue to be delayed. The energy market soared in response to these comments. Brent crude rose 1.78% to $111.2, while WTI crude rose 2.2% to $107.7.
Concerns that rising oil prices could reignite inflation and prompt the U.S. Federal Reserve to consider raising interest rates are prompting investors to turn to safe-haven assets. A rise in U.S. Treasury yields to a 12-month high also added to pressure on risk assets.
Institutional investors also appear to be taking a cautious stance. Spot Bitcoin ETFs saw net outflows of $1 billion in the week ending May 17, according to data from SoSoValue, ending six consecutive weeks of strong inflows.
Analysts say Bitcoin could test the $74,000 support level in the short term, but a rebound is likely once macroeconomic pressures ease. Markets are expected to focus on US inflation data and Fed statements in the coming days.
*This is not investment advice.
