Bitcoin Plunges Below $60K as Japan’s Rate Hike Rattles Global Markets

• Bitcoin has continued its downward trajectory.
• The crypto asset plunged to a new three-week low on Sunday.
• The development came as Japan’s rate hike effects continued reverberating across the global market.

Bitcoin (BTC) piled losses on Sunday as the wider global market sell-off continued into the weekend, buoyed by Japan’s move to hike rates for the second time in 17 years.   

The world’s largest crypto asset by market cap plunged below $60,000 on August 4, barely a week after it rallied toward the $70,000 mark on the back of Donald Trump’s pro-crypto speech at the Bitcoin 2024 conference in Nashville.

Bitcoin Loses Momentum

Bitcoin briefly flirted with the psychologically significant $70,000 level on July 29 before embarking on a downward trajectory, exacerbated by a $2 billion transfer of the original cryptocurrency by the U.S. government.

The crypto asset’s landscape worsened by the end of the week when it tanked to $62,200 on Friday. This came after the Bank of Japan on the previous day raised its short-term interest rate to 0.25% and announced plans to cut monthly bond purchases to 3 trillion yen by early 2026.

While the rate hike propelled the Japanese yen to its strongest levels against the U.S. dollar since March, it sparked a wave of volatility in the market, causing investors to unwind $4 trillion in trades as they readjusted their portfolios and scrambled to fund loan repayments with asset sales.

Long Bitcoin positions liquidated on Friday totaled over $77.07 million, with $26.6 million of that occurring within the last four hours of the day. At the same time, U.S.-listed spot Bitcoin ETFs logged their biggest single-day outflow in three months as investors pulled $237 million from the funds on August 2.

Unlike traditional stocks, which closed trading on Friday, Bitcoin continued to trade during the weekend and dipped to a new three-week low. CoinMarketCap data shows the crypto asset tumbled over 3.5% in the last 24 hours to exchange hands at $59,140 as of press time.

Stay updated on the latest spot Bitcoin and Ether ETF flows:
Bitcoin and Ether ETFs Bleed Millions Amid Wider Market Downturn

Read about Morgan Stanley’s plan for spot Bitcoin ETFs:
Morgan Stanley Commits to Bitcoin: ETF Inflows to Soar?