Bitcoin prices dropped as geopolitical concerns fueled losses.
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Bitcoin prices took a tumble on Monday, July 13, falling as global markets responded to the latest geopolitical tensions involving the Straight of Hormuz.
This development combined with other factors to place downward pressure on the digital asset’s price.
The world’s most valuable digital currency dropped to $61,750.90, according to Coinbase data from TradingView. At this point, the cryptocurrency was down roughly 4% after rising to nearly $64,400 earlier in the day.
Major stock indices including the S&P 500 and the Dow Jones Industrial Average also pushed lower during the day, according to Google Finance data.
“Bitcoin’s recent weakness has been driven by a broader risk-off move across global markets,” Roy Kashi, co-founder and CEO of Falconedge, stated via email.
“Rising tensions between the U.S. and Iran have pushed oil prices higher, reignited inflation concerns and reduced expectations for near-term rate cuts, prompting investors to trim exposure to risk assets.”
Tal Fromchenko, Founder and CEO of Leveraged, offered a similar take, while also citing additional causal factors.
“The pullback to $62,000 is primarily driven by escalating U.S.-Iran tensions over the Strait of Hormuz, which sparked a broader shift away from risk assets while cooling institutional ETF inflows and triggering leveraged long liquidations after Bitcoin failed to break past key resistance on Friday,” he said through emailed comments.
“However, this remains a standard macro-driven flush within a historically healthy multi-year market cycle, leaving Bitcoin’s broader structural trajectory for growth entirely intact,” added Fromchenko, who provided a bullish outlook.
Himanshu Sahay, cofounder and CTO of crypto lender Arch, also weighed in, pointing to various factors when explaining bitcoin’s latest price movements.
“I don’t think this decline is the result of any one event. It’s more likely the market reacting to a mix of macro sentiment, positioning and liquidity, all of which can change pretty quickly,” he noted through emailed commentary.
Saeed Al-Marri, CEO at Ethra Invest, took a different tack, choosing to focus on market factors and an upcoming inflation report due for release later this week.
“I think on the technical side what we’re seeing looks like a wave of liquidations, not a loss of faith in Bitcoin. When traders go long, essentially borrowing money to bet the price will rise, then any drop basically forces exchanges to automatically liquidate those positions once losses hit a limit,” he stated via email.
“Right now, longs are being liquidated six times as often as shorts (6 to 1), which tells you this is bullish bets getting wiped out, not a broad exit from the asset.”
“And on the macro side the bigger driver is what’s coming on Wednesday: US Consumer Price Index (inflation data),” he continued. “If it comes in hot, it pushes back any hope of the Fed cutting interest rates soon, and higher rates make safer options like bonds and cash more attractive than a volatile asset like Bitcoin.
“That’s the real story right now. Its not Bitcoin breaking down, but the whole market waiting on a single number from the CPI.”
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Charles Lloyd Bovaird II