Bitcoin fell to its lowest level in more than six weeks as jitters over the US-Iran war and outflows from US exchange-traded funds weighed on the largest cryptocurrency.
Bitcoin dropped as much as 3.3% to $72,643 in Singapore Thursday, its weakest since April 13. Second-largest token Ether fell more than 4% to $1,965, its lowest in almost two months.
Stocks and bonds fell and oil climbed after fresh attacks in the Middle East hurt optimism for a deal to end the war, raising concerns it will fuel inflation and trigger interest-rate increases. The US carried out airstrikes on an Iranian military site and Kuwait said it was responding to hostile missile and drone threats.
US spot-Bitcoin ETFs have also seen net outflows of about $1.5 billion so far in May. Souring sentiment saw about $873 million of bullish crypto bets unwound in the past 24 hours, of which $512 million was in the last four hours, according to CoinGlass data.
"From what I can see this looks like a liquidation event driven by a confluence of geopolitical shock and over-leveraged long positioning,” said Rachael Lucas, an analyst at BTC Markets. "A clean break below $70,000 would likely trigger a significant and self-reinforcing wave of stop-losses and liquidations.”
Higher US yields and a firmer dollar have tightened financial conditions, while ETF withdrawals and reports of a large block sale of the iShares Bitcoin Trust - the largest Bitcoin ETF - also dented confidence, said Sean McNulty, Asia-Pacific derivatives trading lead at FalconX. - Bloomberg
