Bitcoin Price Dips to $63K Today Amid Rising Geopolitical Risks and Market Sentiment Shift

The price of Bitcoin on Tuesday fell as traders booked profits from a weekend rally that was largely driven by escalating geopolitical tensions and uncertainty over the direction fiscal policy will take. Falling in line with the global stock markets, the largest crypto on earth is settled at $3,106.6 this morning after a 1.4% drop from yesterday´s top to bottom range.

Markets Running Out of Catalyst commerce-barriers

The sizeable sell-off in risk-sensitive markets broadly was fueled by mounting geopolitical tensions, and Bitcoin dipped as well.

The arrest of Huawei Chief Financial Officer Meng Wenzhou, who is also the daughter of the company’s founder and CEO, has stoked fears about escalating tensions between China and both Europe and US after Canada slapped new trade tariffs on Beijing by arresting Charlotte as part or their renewed effort to pressure Beijing economically.

It has raised concern of further friction with the West and rattle global financial stability in a trade war.

There was also a large jump in the price of oil which weighed down markets. Israel and Gaza moved no closer to a ceasefire in their continued conflict, while internal strife over the central bank leadership brought all of Libya’s oil production to an immediate standstill.

 The developments above created a confusing environment that sent investors fleeing from risk assets, including cryptocurrencies and toward safer plays like gold (which has rebounded lately) and the US Dollar which bounced back off of recent lows.

Support from Interest Rate Expectations

Stocks, bonds and commodities were sold off in what one analyst called a “cryptic overture” of the instability facing financial markets but bitcoin managed to survive through the geopolitical mayhem thanks to an anticipated Federal Reserve interest rate cut this week which propped up gains from its weekend source.

According to CME Fed Watch data, dovish comments from Federal Reserve officials increased the likelihood of a rate cut at its policy meeting in September with traders split on whether it would be by 25 or 50 basis points.

Lower interest rates generally benefit speculative assets such as cryptocurrencies because they boost market liquidity and in turn gives investors more capital to direct towards sectors like crypto. This trend was one of the primary forces behind the second largest cryptocurrency bull run this year.

Bitcoin also drew a bid from the U.S. political landscape, as independent presidential candidate Robert F. Kennedy Jr suspended his campaign and endorsed Republican frontrunner Donald Trump,

who has proven more friendly to cryptocurrencies than his Democratic challengers this election cycle which isn’t saying much but you have take what blessings come your way in this game of politics.

The above having been said, Trump’s positive rhetoric on cryptos has prompted hope that a future administration under Trump may favor more sympathetic regulation towards the crypto industry.

altcoins take the beating after bitcoin heads south

The drop in Bitcoin led to a retreat throughout the wider cryptocurrency market. The No. 2 cryptocurrency by market cap, Ether (ETH) was trading for $2,698 after falling 1.9%. Loser: Among the other leading altcoins, Solana (SOL), Cardanol (ADA) and XRP were down in a minor move within sideways low trading.

Meme coins, known for being more volatile even during bull markets, also suffered. Dogecoin (DOGE) one of the most popular meme tokens, fell harder and lost 2.4% on Thursday

Conclusion

The decrease in the price of Bitcoin is a stark reminder that despite all talk, the cryptocurrency market reacts to larger global events at play.

While the expectation for lower U.S. interest rates has underpinned riskier assets, higher oil prices have propped up energy stocks and rising geopolitical tensions surrounding trade issues are capping gains in global equities as a whole.

The collapse of financial markets, monetary easing and escalating trade wars as a result of these global crises will no doubt continue to introduce intense levels of price volatility across Bitcoin and the wider cryptocurrency industry.