Bitcoin fell back below 66,000 during the early U.S. trading session, reversing much of its midweek rebound as investors shifted away from risk assets. The pullback came alongside declines in major cryptocurrencies and crypto related equities, reflecting broader caution across global markets.
The largest digital asset dropped roughly 3 percent within hours, slipping from near 68,000 to around 65,600. Ether, XRP and Solana recorded comparable losses, while broader crypto market indexes also moved lower over a 24 hour period. The retreat erased most of the gains achieved earlier in the week when optimism briefly returned to digital assets.
Crypto linked stocks mirrored the decline. Shares of major exchange operators and corporate bitcoin holders fell as equity markets weakened. Bitcoin mining companies, many of which have increasingly tied their strategies to artificial intelligence infrastructure development, underperformed with steeper intraday losses.
The downturn coincided with weakness in U.S. equity benchmarks. The Nasdaq and S&P 500 both moved lower as macroeconomic concerns intensified. A hotter than expected January Producer Price Index reading weighed heavily on sentiment. Core PPI rose 3.6 percent year over year, exceeding forecasts and reinforcing expectations that interest rates may remain elevated for longer than previously anticipated.
Interest rate futures markets now reflect a high probability that the Federal Reserve will hold rates steady at its upcoming meeting. Delayed rate cuts typically pressure high growth and speculative assets, including cryptocurrencies.
Concerns about potential credit stress have also resurfaced. Credit spreads widened to their highest levels in several months, signaling growing caution among fixed income investors. Shares of prominent private equity firms declined sharply, adding to worries that tighter financial conditions could ripple through broader markets.
Geopolitical tensions have further complicated the outlook. Reports of increased military risk in the Middle East lifted uncertainty, contributing to defensive positioning across asset classes.
Capital has flowed into traditional safe havens. The yield on the U.S. 10 year Treasury note slipped below 4 percent, reflecting rising demand for government bonds. Gold extended its rally and silver surged, while crude oil prices also climbed amid geopolitical concerns.
Derivatives markets suggest that traders expect bitcoin to remain range bound in the near term. Options positioning indicates resistance near the low 70,000 area and support around the mid 50,000 level through March. Following the latest options expiry cycle, many market participants appear to be hedging against further downside rather than positioning aggressively for new highs.
Market analysts note that March has historically delivered mixed performance for major cryptocurrencies, reinforcing the cautious tone among traders. With inflation data surprising to the upside, credit conditions tightening and geopolitical risks escalating, digital assets are trading within a broader macro framework that continues to influence short term price direction.
