Bitcoin Drops Below $59,000 After Worst Week Since FTX Collapse

(Bloomberg) — Bitcoin is under pressure from a wave of risk aversion in global markets, sending the largest digital asset to its biggest weekly loss since the FTX exchange crash of 2022.

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The original cryptocurrency was trading near $58,500 after losing 13.1% in the seven days through Sunday, the biggest loss since FTX went bankrupt. Smaller tokens like Ether and meme crowd favorite Dogecoin also suffered losses.

U.S. stock futures fell early Monday, reflecting concerns about the growth outlook in the world’s largest economy and weakness in giant tech stocks amid questions about whether the artificial intelligence craze has gone too far. Geopolitical tensions are rising in the Middle East, adding to investor unease.

Bitcoin exchange-traded funds in the U.S. experienced their biggest outflow in nearly three months on Aug. 2. The digital asset also fell below its 200-day moving average price.

The second technical chart pattern “paves the way for a deeper pullback to $54,000,” Tony Sycamore, market analyst at IG Australia Pty., wrote in a note.

Bitcoin has been hit by a number of factors since hitting a record high of $73,798 in March, including changing political fortunes in the US, with pro-crypto Republican Donald Trump facing off against Democratic Vice President Kamala Harris, who has yet to provide specifics on digital asset policy.

The risk of oversupply also weighs on the market, with Bitcoin being seized by governments and returned to creditors through bankruptcy.

Bond traders have increased their bets on U.S. interest rate cuts starting in September to support economic expansion. Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors LLC, argued that the recent turmoil in traditional markets “increases the likelihood of less restrictive monetary policy coming sooner, which is a good thing for crypto.”

Bitcoin’s year-to-date gains have slowed to around 34%, compared with a 19% gain for gold and a 9% gain for global stocks.

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