Cryptocurrencies experienced a broad decline on Thursday, with the selloff intensifying during the early U.S. evening hours. Bitcoin dipped over 2.5% in the past 24 hours, falling to around $105,900. However, altcoins faced even steeper declines, with tokens like ether, solana, XRP, and dogecoin dropping between 5% and 7%.
The overall market sentiment soured as risk assets struggled to gain momentum. Early Thursday saw negative headlines, particularly President Trump’s warning about potential renewed tariffs as trade deal deadlines approach in July. Concerns also grew over tense nuclear negotiations with Iran and the possibility of Israeli strikes against Iranian nuclear sites. Trump indicated there’s a significant chance of conflict, urging Americans in the region to evacuate, citing the risk of missile attacks.
Despite these geopolitical tensions, U.S. stocks managed to close modestly higher, shrugging off the headlines. Meanwhile, cryptocurrencies couldn’t escape the downward pressure.
On the brighter side, some market analysts see signs of a cautious recovery. The recent rally in risk assets, including cryptocurrencies, has occurred amid a Federal Reserve seemingly committed to maintaining its current monetary policy stance. Yet, recent economic data suggests that the Fed might be forced to consider easing measures soon. Softening employment gains and lower-than-expected inflation figures, including weaker Producer Price Index data and rising unemployment claims, point to economic slowdown signals.
In particular, May’s Producer Price Index came in softer than forecast, and initial jobless claims unexpectedly increased to 248,000, matching multi-month highs. Continuing claims also rose to nearly 2 million, the highest since November 2021.
In the political arena, President Trump continued to pressure Fed Chair Jerome Powell to adopt a more dovish approach, criticizing him for not cutting interest rates. Trump warned he might need to take direct action, despite Powell’s term running until 2026 and previous statements ruling out firing him early.
As the markets navigate these uncertainties, the crypto space remains highly sensitive to global political and economic developments, making this a pivotal time for investors watching for signs of resilience or further declines.
