Bitcoin has experienced a significant decline, with its price slipping below the crucial $80,000 mark, a level that has acted as a floor for the digital asset in recent days. As of Thursday, Bitcoin traded at $79,200, reflecting a 2.3% drop over the last 24 hours and a 2.2% decrease over the past week, according to CoinGecko data. This decline comes in the wake of renewed inflation concerns and geopolitical tensions exacerbated by recent U.S.-China discussions.
In particular, Solana (SOL) took a notable hit, leading the downward trend among altcoins with a 5.6% decrease, bringing its value down to $90. The cryptocurrency had earlier been a strong performer, but this decline eroded most of its recent gains. Ether (ETH) also saw a drop, falling 2.1% to $2,250, marking a 3% decline over the week and making it the second-weakest performer after Bitcoin. Additionally, Binance Coin (BNB) decreased by 1.6% to $660, though it still maintained a 3.9% weekly gain. XRP slid 1.7% to $1.43, while Dogecoin managed to stay in the green, registering a modest increase of 0.9% to $0.1126.
The market volatility was fueled by geopolitical tensions as President Trump met with Chinese President Xi Jinping in Beijing—the first visit by a sitting U.S. president to China in nearly ten years. The discussions turned contentious when Xi issued a stark warning regarding Taiwan, indicating that mismanagement of the issue could lead to “collision or even clashes.” The timely release of the Chinese government’s account of the summit, prior to its conclusion, heightened global risk aversion and cast a shadow over investor sentiment.
Asian equities reflected this uncertainty, oscillating between gains and losses. The MSCI Asia Pacific index slipped by 0.1% after an earlier increase of 0.8% in trading. Mainland Chinese shares fell 1.3%, despite having reached their highest point since 2021 ahead of the summit. Conversely, the offshore yuan continued its rally, marking an 11-day winning streak—the longest since September 2017—indicating a shift in capital positioning in response to the summit’s developments.
The pressure on cryptocurrencies was further exacerbated by economic data released earlier in the week. The Producer Price Index (PPI) indicated a month-over-month increase of 1.4%, surpassing the forecast of 0.5%, and a year-over-year rise of 6%. This followed Tuesday’s Consumer Price Index (CPI) data, which revealed a 3.8% increase—its highest in nearly three years. These unexpected inflation readings pose challenges for the Federal Reserve’s potential easing of interest rates in the near future, diminishing a key supportive backdrop that many crypto assets had begun to price in.
Despite the overall downturn in the crypto market, there were pockets of positive performance. Cisco shares surged by 20% in extended trading on the back of a better-than-expected sales outlook, contributing to a 2.3% increase in a gauge of Asian technology shares that reached a record high. Nasdaq 100 futures also rose by 0.2%, demonstrating resilience in the artificial intelligence sector even as the broader market faced turbulence.
Looking ahead, Bitcoin’s immediate support level is now at $78,000—a critical point that coincided with an early-May low prior to a rally that pushed its value to $82,000. A fall below this level would suggest a downturn into previous capitulation zones from late April, while maintaining above it would bolster the case for buyers leading into upcoming macroeconomic data and the final outcomes of the Trump-Xi discussions.
