Bitcoin slipped below the $60,000 level on Thursday, extending a multi-week selloff as investors recalibrated expectations for tighter U.S. monetary policy and continued to favor artificial intelligence-linked equities and themes. The world’s largest cryptocurrency briefly fell about 5% in the U.S. session to around $58,000—its weakest level since 2024—before partially recovering to trade near $59,300, down roughly 0.2% over the past 24 hours.
The broader digital-asset complex also weakened, with ether down about 0.8% to roughly $1,560 and other major tokens such as Solana and Dogecoin posting similar declines.
Key takeaways
- Price move: Bitcoin briefly dropped to around $58,000, slipping below $60,000, before stabilizing near $59,300.
- Catalyst: Investors focused on a more hawkish Federal Reserve outlook under new Chair Kevin Warsh, alongside strong capital interest in artificial intelligence-linked investments.
- Implication: Higher perceived opportunity costs for holding non-yielding assets and competition for investor capital appear to be pressuring crypto.
- Market structure: Derivatives data point to risks of a short-term short squeeze if price action rebounds.
What drove the move
Market participants have been repricing the path of U.S. rates, according to the article’s reporting, after policymakers signaled that their next move is more likely to be a rate increase rather than a rate cut. That shift has weakened one of the fundamental supports behind bitcoin’s prior advance—an “easing cycle” narrative that helped attract institutional interest.
Deutsche Bank research analyst Marion Laboure said the institutional allocation case for bitcoin had rested on an easing outlook and that “tightening inverts that premise.” She added that when the risk-free rate rises, the opportunity cost of holding an asset that does not generate yield increases. In that framing, Laboure characterized bitcoin as more of a liquidity-sensitive risk asset than a safe haven when rates are expected to remain restrictive.
At the same time, flows and enthusiasm have continued to concentrate around artificial intelligence beneficiaries. The article cited bitcoin’s roughly 43% decline over the past year alongside a 158% gain in the PHLX Semiconductor Index, home to many of the leading chipmakers tied to AI infrastructure. That relative performance underscores how investor attention can tilt toward high-growth, rate-sensitive equity segments when the macro backdrop becomes less supportive for speculative, non-yielding assets.
Market reaction and derivatives signals
Despite the sharp drop, derivatives indicators referenced in the report suggested that further downside may not automatically translate into a wave of forced selling. Liquidation heatmaps reportedly showed a concentration of liquidation risk above current prices rather than below them, which would imply that a modest move lower may not trigger broad deleveraging.
Instead, traders with short positions could face vulnerability if bitcoin rebounds. The article also pointed to open interest rising by about 0.28% over the past 24 hours even as price declined, suggesting bearish positioning was not broadly being unwound. Funding rates were described as having turned negative, consistent with market participants paying for downside exposure rather than closing out shorts.
Order-book information from CoinGlass, as cited in the article, indicated roughly 6,900 bitcoin (about $409 million) resting in bids between current prices and $50,000. By comparison, approximately 1,570 bitcoin (around $93 million) were reported in sell orders between current levels and $70,000.
Competition for investor capital
The article linked bitcoin’s weakness to continued outflows from spot bitcoin exchange-traded funds. It reported six consecutive weeks of withdrawals totaling approximately $6 billion, described as the largest outflow streak in two years. Persistent ETF redemptions can weigh on demand expectations and, by extension, on price stability—particularly when macro headwinds are also present.
Analysts quoted in the report also questioned the durability of earlier “Sell America” and dollar-debasement narratives that had supported bitcoin’s rise. Yardeni Research founder Ed Yardeni said investors were “rightly skeptical” about the so-called “Sell America Trade,” noting that the debasement narrative lost momentum as tariff concerns eased and recession fears abated. He further tied the potential shift in credibility to the first policy meeting of Fed Chair Kevin Warsh, when, according to the article, Warsh made price stability his top priority.
Jonathan Krinsky of BTIG cautioned that market narratives can change rapidly, especially once a theme becomes widely popular. Laboure added that bitcoin’s evolution as an asset class has altered how investors interpret volatility, describing bitcoin as “maturing into an institutional asset whose price is set by fund flows, Fed expectations, competing risk themes, and legislative outcomes.”
What to watch next
Investors will likely focus on whether ETF outflows continue or start to stabilize, as well as any further signs that rate expectations are moving toward or away from tighter policy. With derivatives positioned for a potential short-term squeeze and macro uncertainty around the Fed still a central driver, upcoming U.S. inflation and central-bank messaging will be key for determining whether bitcoin’s decline extends or reverses.
