Story
Bitcoin Reclaims $60,000 Level After Steep 14% Quarterly Loss
Summary
The leading cryptocurrency staged a modest recovery to start the new quarter but faces significant headwinds from hawkish interest rate expectations and record outflows from U.S. spot ETFs.
Bitcoin rose above the $60,000 threshold on Wednesday, staging a partial recovery a day after closing out a quarter that saw its value fall by 14%. The rebound comes amid persistent market pressure from expectations of higher U.S. interest rates and significant investor withdrawals from spot Bitcoin exchange-traded funds (ETFs).
By 17:55 ET (21:55 GMT), the world's largest cryptocurrency was up 3.7% to $60,807.4, according to Investing.com data. The gain followed a volatile session where the price briefly touched a 22-month low of $57,803.0 earlier in the day.
Headwinds from ETF Outflows and Rate Hikes
The recent price weakness is underpinned by sustained institutional selling. U.S. spot Bitcoin ETFs suffered their largest monthly outflows since their inception, with investors pulling a total of $4.5 billion in June, according to data from SoSoValue. This figure surpasses the previous monthly outflow record of $3.48 billion.
These withdrawals, which have now run for nine consecutive days, reflect broader investor caution. A key factor is the U.S. Federal Reserve's hawkish stance, which has driven expectations for at least one more interest rate hike this year. Higher rates increase the opportunity cost of holding non-yielding assets like Bitcoin, dampening their appeal.
Analysts Revise Forecasts Downward
AdReflecting the challenging market environment, several analysts are adjusting their outlooks. In a note on Tuesday, Citi slashed its 12-month price target for Bitcoin to $82,000 from a previous $112,000, citing weakening investor demand and negative ETF flows.
The bank also trimmed its forecast for Ether to $2,240 from $3,175. Analysts noted that stalled progress on U.S. crypto legislation and a rotation of capital into artificial intelligence-related assets have further dented sentiment.
Broader Crypto Market Sees Relief
Most other major cryptocurrencies tracked Bitcoin's modest recovery on Wednesday. Ether, the second-largest digital asset, climbed 3.8% to $1,631.29. Other altcoins including XRP, Solana, and Cardano also posted gains after sustaining steep losses in the previous quarter.