Bitcoin has retreated below $65,500 on Friday as mounting macroeconomic concerns pushed investors away from risk assets, erasing most of the cryptocurrency’s midweek gains.
The largest cryptocurrency fell 3% from around $68,000 to $65,600 in early U.S. trading, with major altcoins and crypto-related equities following suit in a broader market selloff.
A hotter-than-expected U.S. producer price inflation reading for January spooked markets already anxious about the cooling inflation narrative. Core PPI rose 3.6% year-over-year, surpassing the expected 3.0% estimate and climbing from the previous 3.3% reading.
The inflation surprise has shifted interest rate expectations significantly. Markets are now pricing in a 96% probability that the Federal Reserve will hold rates steady at its March 18 meeting, pushing any potential rate cuts further into the future. This development has dampened enthusiasm for risk assets that had benefited from earlier expectations of monetary easing.
Beyond inflation concerns, stress signals in credit markets have intensified worries among institutional investors. Credit spreads have widened to their largest gap in four months, while major private equity firms have suffered sharp declines. KKR, Ares Management, and Apollo Global Management all plunged 6-7% to fresh lows during Friday’s session, signaling growing concerns about credit stress in the financial system.
Geopolitical tensions added another layer of risk aversion to the market environment. Prediction market odds of U.S. strikes against Iran rose sharply after the State Department began evacuating embassy staff from Israel, introducing another source of uncertainty for investors seeking safer assets.
The crypto market’s weakness mirrored broader equity market declines. The Nasdaq fell 0.8% while the S&P 500 dropped 0.6% as investors rotated toward traditional safe-haven assets. The CoinDesk 20 Index declined 2.3% in the past 24 hours, with ether, XRP, and Solana each posting similar losses.
Crypto-related stocks extended the weakness across the sector. MicroStrategy, the largest corporate holder of Bitcoin, slipped 3% as institutional sentiment deteriorated. Coinbase, a major cryptocurrency exchange, fell more than 2%, while Circle, the stablecoin issuer, declined nearly 5% after a recent 50% rally was reversed.
Bitcoin mining stocks performed worse than the broader crypto sector, reflecting their sensitivity to risk-off sentiment. Iris Energy, Cipher Mining, Core Scientific, and TeraWulf each lost 6-8% as investors liquidated positions in assets linked to both cryptocurrency and artificial intelligence infrastructure development.
Traditional safe havens rallied as investors sought shelter from elevated risk. The U.S. 10-year Treasury yield slipped below 4% for the first time since November 2024, attracting bond buyers fleeing equities and crypto. Precious metals extended their rally, with gold rising 1% to above $5,230 per ounce and silver surging 4% to trade above $92.
Crude oil also climbed, jumping 2.3% to above $67 per barrel as geopolitical tensions added a risk premium to energy prices. The move reflected broader concerns about potential supply disruptions from escalating Middle East tensions.
The convergence of inflation concerns, credit stress signals, and geopolitical risks has created a challenging environment for Bitcoin and risk assets broadly. Investors are reassessing their portfolios in light of delayed rate-cut expectations and mounting economic uncertainties that could persist through the first quarter of 2026.
Bitcoin’s retreat below key technical levels suggests that the cryptocurrency has lost momentum amid the shift toward risk-off sentiment. The selling pressure reflected both retail and institutional repositioning as market participants adjusted for a potentially longer period of elevated interest rates and heightened macroeconomic uncertainty.
If you’re reading this, you’re already ahead. Stay there, by joining the…
Dipprofit’s private Telegram community
Discover more from Dipprofit
Subscribe to get the latest posts sent to your email.
