Bitcoin Price Dips Amid Geopolitical Tensions and Tech Sector Downturn

Bitcoin extended its losses on Tuesday, with its price falling 1.4% to $63,305.0 in late trading. The decline in the world's largest cryptocurrency was attributed to a broader risk-off sentiment in financial markets, driven by escalating geopolitical tensions in the Middle East and a notable sell-off in technology stocks.

The U.S. military launched retaliatory strikes against Iran following reports of attacks on three oil tankers in the Strait of Hormuz. U.S. Central Command described the strikes as a response to what it called "unwarranted, dangerous" aggression by Iran. The United Kingdom Maritime Trade Operations had earlier reported the attacks and raised its regional threat level to "severe," contributing to a spike of over 5% in oil prices and increased market uncertainty.

Adding to the pressure on cryptocurrencies was a slide in technology stocks. The downturn was reportedly influenced by investor concerns that the artificial intelligence sector had become overvalued, a sentiment that persisted even as Samsung Electronics forecasted a record second-quarter profit. This tech-led weakness had a spillover effect on risk-sensitive assets like Bitcoin.

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Despite the negative price action, institutional demand showed signs of improvement. U.S.-listed spot Bitcoin ETFs recorded net inflows of $265.7 million on Monday, building on a $221.7 million inflow on July 2. This marks a significant reversal from late June, when the funds saw nearly $2.4 billion in outflows over several sessions.

Other major cryptocurrencies, or altcoins, also trended lower. Ethereum, the second-largest crypto, fell by 1.8%, while XRP, Solana, and Cardano also registered losses. Market participants are now looking ahead to the release of minutes from the Federal Reserve for further indications on the future of U.S. interest rates.