Bitcoin’s price has sharply declined by 8% over the past 24 hours, dropping to $84,000. This downturn is attributed to increasing global economic uncertainty, reduced liquidity, and renewed stress within the cryptocurrency market. Bitcoin, the world’s largest digital currency, has now fallen more than 30% from its October record highs. Although there was some recovery last week, with prices briefly rising above $92,500, the market reversed course on Sunday evening, falling below $85,000 by Monday. Key factors contributing to this volatility include a security flaw in the Yearn Finance protocol, which allowed an attacker to issue a large number of counterfeit tokens, triggering panic in the DeFi sector and impacting major cryptocurrencies like Bitcoin and Ethereum.
Pressure is also mounting in global financial markets, especially after a sudden rise in Japanese government bond yields, signaling a potential shift in interest rate policies worldwide. Recent comments from the Bank of Japan’s governor suggest the possibility of ending Japan’s negative interest rate policy for the first time in years. This could strengthen the yen and force hedge funds reliant on cheap Japanese borrowing to unwind positions, negatively affecting risky assets including Bitcoin. Furthermore, low liquidity has weakened buy and sell orders, exacerbating price declines. Over 220,000 traders closed positions in the last 24 hours, resulting in losses exceeding $630 million.
On the corporate front, Strategy Inc. has set aside $1.4 billion to pay preferred dividends amid Bitcoin’s price drop and has recently purchased an additional 130 Bitcoins. Investment firms like BlackRock and JPMorgan have also increased their exposure to Bitcoin-linked financial products, indicating growing institutional interest in the crypto market. While Bitcoin’s price remains volatile, uncertainty over financial policies—especially regarding the U.S. Federal Reserve’s upcoming decisions on interest rates—will likely determine market direction. A rate cut could support Bitcoin prices, whereas stable rates may lead to further declines in risky assets.
Source: bitcoinmagazine
