Bitcoin slipped below $63,000 on Friday but remains on pace to end July up roughly 7.5% despite rising rate-hike bets, higher bond yields, an AI-trade unwind and a hardware-wallet hack. Analysts say the leverage that drove forced selling was already flushed out in June, and the next test is next week's jobs report and whether spot bitcoin ETF inflows resume.
Bitcoin slipped below $63,000 on Friday, down about 3% on the day. The largest cryptocurrency is still on track to end July up roughly 7.5%, a resilient showing given a month of rising rate-hike bets, climbing bond yields, an AI-trade unwind and a hardware-wallet hack.
Leverage flush limits forced selling
Bitcoin has held up better than equities because of positioning, Bitfinex analysts said. Crypto entered the Fed meeting with far less leverage than stocks after derivatives traders were largely flushed out during the selloff in late June that pulled bitcoin below $58,000 on July 1.
Average daily liquidations have since stayed well below this year's typical $400 million-$500 million range, the analysts said, pointing to little forced selling despite the macro shock. According to Bitfinex analysts: "Crypto fell less than levered equity themes because the forced-selling fuel was already spent."
Coldcard hack adds pressure
The market is also digesting fallout from a security incident involving Coldcard, a hardware wallet, that resulted in at least $38 million worth of bitcoin being stolen. Paul Howard, director at trading firm Wincent, said the proceeds have not yet been liquidated, but the incident's knock-on effects will weigh on bitcoin pricing in the near term and highlight the operational risks that come with self-custody.
Jobs data and ETF flows are next test
Markets may be entering a new stretch of volatility, said Jeff Anderson, managing partner at STS Digital, as investors swing between bets on rate cuts, pauses and hikes. That uncertainty, he said, is likely to keep pressure on high-beta assets such as bitcoin until the economic outlook becomes clearer.
Bitfinex analysts expect investors to stay defensive heading into next week's U.S. jobs report, the next major macro catalyst after the Fed meeting. Rather than another wave of forced liquidations, they said the bigger question is whether spot bitcoin ETF inflows resume once markets get a clearer read on the Fed's path.
Lacie Zhang, research analyst at Bitget Wallet, said the base case is a choppy August with bitcoin range-bound unless real yields fall or ETF flows turn consistently positive again. The market can absorb a neutral Fed, she said, but not a stronger dollar, higher real yields and weak ETF demand all at once.
Source: CoinDesk
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