Bitcoin Falls Below $60,000 To Hit Multi-Year Low: Why Are Cryptocurrencies Falling?
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Stronger US dollar, Fed rate concerns and uncertainty over crypto legislation trigger sell-off; analysts see $59,000 as crucial support.
The sharp decline came as the US Dollar Index (DXY) climbed to a 13-month high, weighing on cryptocurrencies that have historically shown an inverse correlation with the greenback.
Bitcoin slipped below the psychologically important $60,000 mark on Thursday, hitting a multi-year low of around $59,000 as investors continued to shun risk assets amid a stronger US dollar, persistent inflation concerns and uncertainty surrounding US crypto legislation. The crypto had last traded below $60,000 in October 2024.
The world’s largest cryptocurrency later pared some of its losses and was trading at $61,629.21 at around 11:05 am IST, down 2.09% over the previous 24 hours, according to CoinMarketCap data. Ethereum recovered to $1,650.79, while BNB and XRP traded at $570.12 and $1.09, respectively.
The sharp decline came as the US Dollar Index (DXY) climbed to a 13-month high, weighing on cryptocurrencies that have historically shown an inverse correlation with the greenback. Investors also remained cautious ahead of key US macroeconomic data, including the Personal Consumption Expenditures (PCE) inflation report, GDP figures and weekly jobless claims, which could influence the US Federal Reserve’s interest rate trajectory.
Akshat Siddhant, lead quant analyst at Mudrex, said, “Bitcoin hit a multi-year low of $59,000 as risk-off sentiment continued to dominate global markets. The dollar index stands at a 13-month high, indicating growing confidence in the US economy. Typically, BTC and the dollar have shown an inverse correlation, adding to the selling pressure.”
He added that sentiment was further dented after US President Donald Trump delayed signing the housing bill that includes provisions banning central bank digital currencies (CBDCs), creating uncertainty around the timeline for crypto-related legislation.
“For now, investors are closely watching key US macroeconomic data, including the PCE inflation report, GDP figures, and jobless claims, which could play a major role in determining Bitcoin’s next directional move,” Siddhant said.
Piyush Walke, derivatives research analyst at Delta Exchange, said Bitcoin’s fall below $60,000 reflected a combination of macroeconomic and market-specific pressures.
“Bitcoin plunged below the key $60,000 support level on Wednesday, falling to around $59,068 amid a sharp market sell-off. The decline was fueled by investor concerns over financing risks at Strategy Inc., a broader shift of retail capital toward AI-related stocks, persistent inflation, and expectations of higher interest rates from the Federal Reserve,” Walke said.
He noted that the surge in the US Dollar Index added to the selling pressure, with Bitcoin and the dollar typically moving in opposite directions.
According to Walke, the $59,000 level has emerged as a critical support zone after repeatedly holding during previous corrections.
“A break below $59,000 could trigger a deeper correction toward the $52,000 region. On the upside, immediate resistance is located between $64,400 and $65,000, which also coincides with the 21-day EMA rejection zone,” he said.
Walke also flagged weakness in Ethereum, saying the second-largest cryptocurrency remains under pressure after slipping below $1,580.
“If bears push the price below $1,550, a deeper decline toward $1,440 could follow. On the upside, the $1,680-$1,700 zone now acts as the key resistance area that bulls must reclaim to regain momentum,” he added.
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Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalis…Read More
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