Bitcoin fell 2% to just above $62,000 as risk-off sentiment and Fed minutes pressured markets

Bitcoin traded just above $62,000 after declining roughly 2% in the last 24 hours, as global risk aversion intensified. This latest drop was not solely due to losses in cryptocurrencies—sharp declines in semiconductor and artificial intelligence stocks also contributed to a broader market pullback.

Global headwinds intensified

Volatility surged in Asian markets overnight following profit-taking linked to Samsung shares, while escalating military tensions between the US and Iran pushed oil prices nearly 5% higher. Against this backdrop, US stock indexes opened lower. The same day, the US Federal Reserve released the minutes from its June meeting. As the world’s most influential central bank, the Fed’s guidance on interest rate policy remains in the global spotlight.

Market pricing indicated a nearly 73% possibility that the Fed will keep rates unchanged at its upcoming July 29 meeting. As a result, investors focused less on the expected rate decision itself and more on the meeting minutes’ forward guidance.

Futures activity set the tone

Earlier in the week, investor appetite for Bitcoin appeared stronger. According to cumulative volume delta data, Monday saw about $585 million in net buying in the futures market and $119 million in the spot market, bringing the total to $705 million and sending BTC above $64,000.

By Wednesday, however, sentiment had reversed. Climbing oil prices, sharp selloffs in semiconductor stocks, and a cautious mood ahead of the Fed minutes prompted investors to scale back risk. Selling in crypto futures reached nearly $500 million, while spot market selling totaled $86 million.

Declines in funding rates and open interest pointed to traders reducing their positions. Still, funding rates remained positive for much of the week, suggesting underlying demand persisted despite risk-off moves.

Mini glossary: The funding rate refers to periodic payments between long and short positions in futures markets to maintain balance. Open interest represents the total number of outstanding futures contracts that have not been closed, indicating the level of leveraged interest in the market.

Long liquidations surged

While total liquidations remained moderate in dollar terms, the pressure was overwhelmingly on the long side. On Wednesday, most forced closures affected long positions: about $47 million in long liquidations compared to just $4 million in shorts.

Data showed a significant cluster of long positions around the $61,000 area. Should the price retest this range, a cascade of forced liquidations could temporarily intensify downside pressure. Nevertheless, some buyers appeared ready to absorb dips below $60,000, with spot market and Bitcoin ETF demand indicating continued appetite within the current range.

Market sentiment remains fragile

Recent price action demonstrated how quickly bullish momentum and market confidence can evaporate when the rally is led by derivatives. The Crypto Fear & Greed Index continued to signal a market in “fear” territory.

In addition to geopolitical tensions and Fed uncertainty, sentiment was further weighed down by a recent sale of 3,588 BTC by Strategy. Bitcoin’s price remains below the company’s average acquisition cost of $74,582, leading investors to speculate that one of the largest BTC holders may accelerate sales if the pressured environment continues.

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