Bitcoin is currently trading near a critical level typically observed late in bear markets, maintaining this position even in the wake of the highest U.S. inflation readings seen in three years. According to Checkonchain data, BTC has fallen close to its 200-week moving average—a key four-year trend line that long-term holders monitor closely. This analysis indicates that Bitcoin is situated in the bottom 10% of its historical valuation range, a scenario usually witnessed during the depths of prior bear markets.
Market sentiment reflects a pervasive sense of gloom, with the Crypto Fear and Greed Index, a sentiment gauge that considers volatility, social media engagement, and market volumes, falling to 9, signaling extreme fear. This decline from 11 the previous week and 48 a month ago suggests that price-sensitive sellers have largely completed their selling.
Bitcoin recently dipped below $60,000 for the first time since 2024, trading at approximately $62,623 on Thursday, reflecting a daily increase of 1.9%, but still showing a decline over the week amidst persistent ETF outflows. Other cryptocurrencies experienced similar minor upticks, with Ether rising 1.4% to $1,651, BNB increasing by 1.3% to $595, Solana gaining 0.9% to $65, and Dogecoin up 1.1% to $0.085. However, overall performance remains down for the week, especially for Ether and XRP, which have seen drops of 6.5% and 7.5%, respectively.
The situation has been exacerbated by recent inflation trends, with U.S. consumer prices rising 0.5% from April and 4.2% year-on-year—the quickest annual pace since early 2023. The core measure, which excludes food and energy prices, showed a smaller-than-expected increase of 0.2%. Economic pressures are further fueled by geopolitical tensions, particularly the renewed conflict in Iran driving energy prices higher.
Hopes for regulatory clarity in the U.S. have also diminished, as odds for the Clarity Act’s passage in 2026 dropped from 62% to 48%. Upcoming Federal Open Market Committee (FOMC) meetings on June 16-17 will be pivotal, with commentators observing that any shifts in tone from key officials could significantly influence Bitcoin’s trajectory—potentially rallying towards the $68,000-$72,000 range or plunging below $60,000.
The pressure in the crypto sector reflects broader market concerns, with global equities experiencing a downturn and reaching a one-month low, primarily influenced by a tech-led selloff. Reports indicate that U.S. military actions targeting Iran have contributed to the collapse of a ceasefire and raised tensions. As a result, the MSCI All Country World Index has dropped to its lowest level since May, and Brent crude has seen a rise of 1.8% to around $95 per barrel. Market expectations also suggest that the European Central Bank may raise interest rates for the first time since September 2023, with investors bracing for higher borrowing costs globally.
