Bitcoin is heading towards its fifth consecutive weekly loss, a downturn the cryptocurrency hasn’t seen since 2022. As geopolitical tensions simmer in the Middle East, Bitcoin is struggling to maintain its footing, trading below $67,000 with a week-to-date decline of around 3%. If it closes the week at these levels, it would mark the longest losing streak since March to May of 2022.
In October, Bitcoin soared to an all-time high of nearly $126,500 but has since experienced a significant downward correction, falling over 50% and reaching a low of $60,000. This marked a challenging phase as Bitcoin now faces five straight monthly declines, second only to a six-month losing streak recorded from 2018 to 2019.
Against gold, Bitcoin has also struggled, seeing its underperformance extend to seven months—the longest duration in its history where it has not kept pace with the precious metal. These metrics have traders concerned about Bitcoin’s resilience amid a broader market downturn.
The current geopolitical climate is not helping matters. Rising tensions in the Middle East have led to a significant buildup of U.S. military resources in the region, the largest since the 2003 Iraq invasion. Predictions of potential military strikes against Iran have sent ripples of uncertainty through the financial markets.
The U.S. dollar index has surged to 97.7, indicative of a flight to safety as investors seek refuge from instability. Meanwhile, oil prices have risen to $65, complicating the scenario for risk assets like Bitcoin. Historically, a stronger dollar paired with higher oil prices has negative implications for cryptocurrencies.
On the stock market front, U.S. stock futures showed a slight upward movement, with S&P 500 futures inching up by 0.2%. Investors are holding their breath ahead of critical economic indicators and the latest earnings report from retail giant Walmart, which is seen as a barometer for the health of the American consumer.
Market analysts have been closely analyzing the Minutes from the Federal Reserve’s January meeting, which revealed a divide among policymakers regarding potential interest rate hikes to combat persistent inflationary pressures. While expectations for two rate cuts before the year’s end have remained largely unaffected, the discussion has injected a level of uncertainty into future monetary policy.
The significance of Walmart’s earnings cannot be overstated as they are anticipated to provide insights into the resilience of consumer spending amid the current economic landscape, which includes renewed tariff discussions that have stirred controversy regarding their impact on consumers and businesses alike.
As Bitcoin approaches what could be its longest losing streak in recent memory, traders and investors alike are bracing for potential implications on the broader crypto market and beyond. Monitoring developments in the geopolitical context and reactions to economic indicators will be key in the upcoming weeks.
