Bitcoin drops below US$82,000 amid risk aversion and Middle East tension
Bitcoin fell below US$82,000 on Thursday, giving back part of the gains accumulated earlier in the week as pressure on global markets weighed on digital assets. The largest cryptocurrency dropped as much as 4% and traded around US$81,700. Smaller tokens including Ether, Solana and XRP also fell by between 3% and 4.5%.
The move came amid the fallout from mixed results from technology companies and an escalation of tensions in the Middle East that pushed oil prices higher. Stock markets in Asia, Europe and the United States retreated, while Brent crude rose above US$112 a barrel.
Caroline Mauron, co-founder of Orbit Markets, said the weakness in equities had brought Bitcoin back to its recent trading range. She said she expected the US$85,000 level to be tested again in the coming days, although investor conviction should remain limited, and added that firmer signals from the Federal Reserve could also weigh on market sentiment.
The decline towards US$81,000 brought Bitcoin close to its 50-day moving average, a widely watched indicator. Alex Kuptsikevich, chief market analyst at FxPro, said that this return to the 50-day moving average meant buyers could not celebrate a quick victory.
Despite the correction, institutional demand for Bitcoin showed signs of recovery through exchange-traded funds. US-listed spot Bitcoin ETFs recorded net inflows of US$1.1 billion this week, reversing part of the US$909.6 million in net outflows seen over the previous two weeks. Open interest on the Deribit options platform continued to show demand for protection against further declines, with the largest open positions in put options expiring on Friday carrying a strike price of US$78,000.
Bitcoin remains about 35% below its record high of more than US$126,000 reached a year ago. A recovery that began in August had raised expectations that the cryptocurrency could return to US$100,000 this year, but recent market turbulence, driven in part by concerns over spending on artificial intelligence, has tempered that optimism. Pratik Kala, a portfolio manager at Apollo Crypto, said Bitcoin had shown impressive resilience in the face of macroeconomic shocks and the unwinding of positions linked to the AI theme, and that the next move should still be upwards.
