Cryptocurrencies falling weekly, Bitcoin recovers position above $71,000

Cryptocurrencies falling was the dominant scenario over the weekend, with the largest digital currency testing critical resistances while the overall market faced significant macroeconomic pressures. At the start of Asian trading, Bitcoin retreated to around US$ 65,700, erasing more than half of Wednesday’s strong rally when the asset approached US$ 70,000. However, current data shows a remarkable recovery, with Bitcoin trading around US$ 71,080, up 3.19% in the last 24 hours, signaling a possible reversal of the downward trend.

The Trigger: When Wall Street Sneezes, Crypto Catches a Cold

Thursday and Friday trading in the US brought the catalyst for widespread risk sentiment. The S&P 500 fell 0.4%, the Nasdaq 100 declined 0.3%, and the Dow Jones plummeted 1.1%. Nvidia, still processing its post-earnings reaction, lost an additional 4.2%, intensifying market anxiety. A new peak of 0.5% above expectations in producer prices added fuel to inflation concerns, reinforcing bets that the Federal Reserve may keep interest rates high for longer. Mass layoffs at Block Inc. further amplified fears that AI is beginning to destroy jobs rather than create them.

Amplification in Crypto Markets

While a 0.4% drop in the S&P translated into a marginal move for stocks, cryptocurrencies experienced a much sharper impact. Bitcoin fell 3% during this period, but altcoins suffered even steeper losses. Solana declined 6.7%, Ethereum retreated 6.2%, Dogecoin lost 5.1%, and XRP dropped 4%. Only BNB performed better, with a limited decline of 2.5%. This amplified volatility revealed the leverage that had re-entered the system during Wednesday’s rally, quickly wiped out by the shifting sentiment.

Updated data, however, shows a broad recovery: Solana gained 3.45% in 24 hours, Ethereum recovered 3.22%, Dogecoin rose 2.13%, XRP advanced 2.14%, and BNB increased 2.22%, suggesting a possible stabilization after weekend sales.

Conflicting Signals: Institutional Strength vs. Macroeconomic Storm

Paradoxically, institutional flows were surprisingly strong during the week. US spot Bitcoin ETFs received $1.1 billion in deposits in just three days, putting these products on track for their best weekly performance in months. However, this influx of institutional capital proved insufficient to overcome the broader macroeconomic pressures dominating market psychology.

As Dom Harz, co-founder of BOB (a Bitcoin-focused finance company), pointed out: “Excessive analysis of short-term price movements is misguided. Bitcoin’s volatility is not surprising to long-term investors who have experienced previous cycles. The difference this time is the quality and type of institutional capital entering the space.”

Warning Signs in Stablecoins and Sustainability Concerns

CryptoQuant data reveals cause for concern: USDT reserves on exchanges fell from $60 billion to $51.1 billion over the past two months. The company warned that if these reserves drop below $50 billion, it could trigger a potentially destructive “cascade sell-off.”

Additionally, Strategy faces growing skepticism in the market regarding the sustainability of its debt-funded Bitcoin buyback program, with the company’s shares leading the list of short interest among the largest US corporations. Meanwhile, in the Ethereum ecosystem, major accumulators like DAT ETHZilla have formally abandoned their ETH accumulation strategies, rebranding to focus on tokenized real-world assets.

The Critical Level: Where Bitcoin Gets Stuck

Bitcoin has returned to the US$ 60,000 to US$ 70,000 range, the same band it has been stuck in since the February 5 collapse. Wednesday’s testing showed that the top of this corridor remains a formidable resistance. The most pressing question for the market now is: with the current recovery positioning Bitcoin above US$ 71,000, can the lower support of US$ 60,000 hold as a floor?