Shake-up in crypto markets: Bitcoin has been falling for three weeks

Ongoing geopolitical risks in global financial markets and uncertainties regarding the path the US Federal Reserve (Fed) will take in its monetary policy continue to pressure risky assets. US President Donald Trump's nomination of Kevin Warsh to head the Fed, and expectations that Warsh will not pursue aggressive interest rate cuts, have increased the cautious stance of investors.

Concerns among technology firms regarding the reflection of artificial intelligence investments on corporate profitability, and questions about the sustainability of stock valuations, have brought selling pressure on tech stocks. These developments have also led to sharp price declines in the crypto market.

In the last week, Bitcoin lost 16.5 percent of its value, falling to 69,923 dollars, marking the third consecutive week of a downward trend. The loss since the beginning of the year has reached 20.1 percent, and Bitcoin has pulled back to levels around 60,000 dollars, the lowest seen since October 2024. A similar picture was observed in Ethereum; Ethereum fell 23.3 percent last week to 2,055 dollars.

On the other hand, the total market value of the global cryptocurrency market has decreased by more than 2 trillion dollars from the 4 trillion 379 billion dollar level it reached in October, currently standing at around 2 trillion 300 billion dollars. More than 1 trillion dollars of this erosion occurred in the last month alone.

"INVESTORS HAVE TURNED TO PRECIOUS METALS"

CoinTR CEO Ali Eşelioğlu stated in his assessment, "Bitcoin falling below 70,000 dollars to see the 60,000 dollar level and the downward trend extending into the third week is primarily related to the weakening in global risk appetite."

Expressing that the increasing geopolitical tension and environment of uncertainty have directed investors back to precious metals, Eşelioğlu noted that the exit from cryptocurrencies, primarily Bitcoin, which is seen as a riskier asset, has accelerated.

Eşelioğlu added that the postponement of expectations for Fed interest rate cuts, hesitations regarding monetary expansion, and the resurfacing of Kevin Warsh's past statements on monetary policy have brought about a cautious stance in the markets.

Emphasizing that Warsh is a figure who has warned for many years that loose monetary policies could trigger inflation, Eşelioğlu conveyed the view, "Although Warsh has expressed more recently that interest rates should be cut faster, this change in rhetoric has increased the perception of uncertainty regarding monetary policy."

THE IMPACT OF "WHALE" INVESTORS CONTINUES

CoinShares Head of Research James Butterfill stated that on Monday, the crypto market saw the largest Bitcoin inflow of the year with 506 million dollars, but this movement was not long-lasting. Reporting a total outflow of 746 million dollars in the two trading days following the first day of the week, Butterfill said, "Sales by 'whale' investors, who hold large amounts of cryptocurrency and can therefore directly influence price movements, appear to be the main trigger for the sell-off wave."

Butterfill pointed out that such large-scale transactions, even if there is no structural reason in the market, can create a ripple effect and deepen the decline. He also emphasized that "whale" investors have sold more than 29 billion dollars worth of Bitcoin since October. He noted that last week, a limited net purchase of approximately 72 million dollars was observed at current price levels, which provided cautious signals that there might be a slight easing in selling pressure.

In conclusion, value losses and volatility in cryptocurrency markets may continue to be the focus of investors in the coming period.

News Source: 12punto