- Bitcoin prices fell to their lowest levels since mid-July, falling to nearly $62,000 on August 1.
- Stocks also tumbled as investors reacted to the latest economic data and geopolitical tensions in the Middle East.
Bitcoin prices plunged 10% to nearly $62,000 on Thursday, adding to a painful start to August for cryptocurrencies and stocks.
On August 1, the global cryptocurrency market value fell to US$2.3 trillion, an overall decrease of 5.7%. BTC fell to a low of $62,300 on major cryptocurrency exchanges. Ethereum also fell to lows of $3,000, while Solana fell sharply back to $160.
XRP, Dogecoin, and Pepe also experienced significant declines.
Impact of Economic Data and Geopolitical Tensions
The entire cryptocurrency market saw losses as stocks plummeted, with the Dow Jones Industrial Average down more than 600 points and the S&P 500 down 1.5%. According to CNBC, weak data released on Thursday gave investors new uneasiness about a possible economic contraction, causing the stock market to tumble.
The market’s reaction also followed Wednesday’s Federal Open Market Committee (FOMC) meeting, although analysts said the market had fully priced in a September rate cut. Geopolitical tensions in the Middle East have also caught investors’ attention.
Factors Affecting Bitcoin’s Future
Commenting on the overall outlook ahead of the sharp sell-off, analysts at Singaporean firm QCP Capital noted:
“Cryptocurrencies have experienced a broad sell-off overnight into this morning. The market remains on edge as traders keep a close eye on daily ETH ETF outflows and further supply pressure from Mt Gox and the U.S. government.
According to QCP, the long-term outlook for Bitcoin remains bullish. A key catalyst could be the upcoming U.S. election and the U.S.’s pursuit of a sovereign Bitcoin reserve.
In a report published by BTC, QCP Capital added: “The establishment of ‘put options’ by the United States or sovereign countries on the price of BTC could have a significant impact, potentially making bargain hunting a strategic investment method.”
BTC was trading at around $63,007 at 2:40 pm ET on Thursday, above the intraday low.
