Bitcoin’s price fluctuated significantly in Asian trading hours on Friday, as global asset sell-off continued for the third consecutive day. Despite the rebound from lows near $62,500, Bitcoin remained under pressure, hovering near its 50-day moving average, a crucial technical support level for traders.
The sell-off was fueled by geopolitical tensions in the Middle East, causing Bitcoin to drop to as low as $62,500 in late U.S. trading hours on Thursday. By 6:30 UTC on Friday, Bitcoin had recovered slightly, trading just below $64,000. Analysts are closely watching key support levels around $63,000 and $61,000, where the 50 and 200-day moving averages are located. A failure to hold these levels could potentially lead to a further decline towards $55,000, which is a concerning prospect for traders.
Historical data shows that August is one of the weakest months for Bitcoin, with the cryptocurrency ending the month in negative territory more often than not. The average decline in August has been 15.4%, while the average increase has been 26% over the past 13 years.
The broader cryptocurrency market also experienced losses, with major tokens like Ether (ETH), XRP, and Solana’s SOL dropping in the past 24 hours. The CoinDesk 20 (CD20) index, which tracks the largest tokens by market capitalization, excluding stablecoins, was down 2.44%.
The negative sentiment in the crypto market was mirrored in global equities, with the Nasdaq 100 and S&P 500 Index both posting losses on Thursday. Concerns around the U.S. economy and future earnings of technology firms weighed on investor sentiment, leading to a broad-based sell-off in equities.
Despite the overall market downturn, Microstrategy (MSTR) stood out for its strong performance in the second quarter of 2024. The company reported a 3.7% increase in Bitcoin per share via “intelligent leverage,” announced a planned $2 billion equity offering for BTC purchases, and adopted fair-value accounting for BTC by the first quarter of 2025. This move is expected to benefit the broader Bitcoin market.
Year-to-date, MSTR has seen a significant increase of 118%, outperforming Bitcoin, which is up 45% according to CoinDesk Indices data. The performance of MSTR highlights the growing institutional interest and adoption of Bitcoin as a strategic asset.
Overall, the market remains volatile, with geopolitical tensions and macroeconomic factors influencing investor sentiment. Traders are closely monitoring key support levels in Bitcoin and other cryptocurrencies to gauge the direction of the market in the coming days.