Bitcoin dropped 2.7% to $62,995.8 on Friday as Federal Reserve rate uncertainty and Middle East tensions kept traders cautious even as tech stocks rallied. Strategy posted an $8.22 billion quarterly loss and Coinbase shares fell 10.6% on weak earnings, while Bitcoin stayed up more than 7% for July. Separate data show Bitcoin now entering a historically weak August, with the Fear & Greed Index at 25.
Bitcoin fell 2.7% to $62,995.8 by 17:34 ET on Friday, as uncertainty over the Federal Reserve's interest rate path and Middle East tensions kept traders on the sidelines even as artificial-intelligence-linked tech stocks rallied. The cryptocurrency remained on track for a monthly gain of more than 7%, rebounding from a more than 20% wipeout in June.
Fed uncertainty compounds Iran tensions
Bitcoin showed little reaction after the Fed's decision earlier this week to leave interest rates unchanged, and investors were left with few clues on the timing of future moves. Three Federal Reserve board members voted to raise interest rates at Wednesday's meeting, adding to the uncertainty. The muted move in bitcoin contrasted with a rebound in global tech stocks, led by upbeat earnings from Microsoft that reignited optimism around artificial-intelligence spending.
Traders also stayed wary of tensions in the Middle East after recent U.S.-Iran hostilities, which have kept oil prices elevated and reinforced concerns that persistent inflation could delay monetary easing. Higher energy prices are seen as a risk to the inflation outlook, potentially limiting the Fed's room to cut rates later this year.
Strategy's loss, Coinbase's tumble
Strategy, the largest corporate holder of Bitcoin, posted a second-quarter loss of $8.22 billion as lower Bitcoin prices forced mark-to-market losses under fair-value accounting. The company still increased its Bitcoin holdings by about 11% during the quarter. Its Class A shares ended 4.6% lower on Friday.
Coinbase Global's Class A shares fell 10.6% after the exchange reported a wider-than-expected quarterly loss and weaker revenue, as subdued trading volumes weighed on transaction income. The slide came amid doubts that lawmakers would pass the Clarity Act this summer, the closely watched crypto-market legislation.
Ether outperforms as altcoins diverge
Ethereum shed 2.9% to $1,862.42 but surged more than 18% for July, the month's strongest performer among major tokens. XRP eased 1.9% to $1.0643. Cardano and Solana declined 1.2% and 2%, respectively.
Spot Bitcoin ETFs still drew $233 million of net inflows the previous day. The iShares Bitcoin Trust ETF added $183 million in assets under management over the same day.
August's weak seasonality looms
Asian semiconductor stocks also lost steam, with Samsung Electronics and SK Hynix surrendering momentum after surging roughly 25% on Thursday. Sentiment also deteriorated: the Crypto Fear & Greed Index fell to 25, down from 28 a week earlier.
Bitcoin's median return in August stands near negative 8%, putting $58,000 in focus as a potential support level. According to Ali Charts: "posted an average decline of 10% during the month" over the past four years.
A recovery above $63,000 would be an early sign that buyers are absorbing supply. A break below $58,000 could open the door to a deeper correction if thin liquidity meets leveraged long liquidations.
Sources: Cryptocurrency News, Fool, crypto.news
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