Bitcoin price stalls at $70,000 as Asian tech stocks dip

Bitcoin price marched back above $70,000 on Friday morning, erasing part of the losses seen over the past two days. However, its momentum quickly gave up as Asian tech stocks dropped lower.

After dropping over 8% to a weekly low of $69,298 on Thursday, Bitcoin (BTC) price rebounded back above the $70,000 psychological mark that many analysts say acts as a crucial anchor for investor confidence. The bellwether was trading at $70,749 at press time with a market capitalization of $1.41 trillion.

Bitcoin price rallied as bulls bought the dip under $70,000, which occurred after news of an Israeli attack on Iranian energy sources broke out, sparking fears of rampant global inflation as oil prices rose to record highs. 

At the same time, risk sentiment deteriorated amid a string of weak economic data. This coincided with stronger-than-expected PPI data and Federal Reserve Chair Jerome Powell suggesting the central bank intends to hold interest rates steady as long as inflation remains elevated.

While Bitcoin has managed to reclaim the $70,000 psychological support level, several hurdles could potentially stand in its path for more gains.

First, Asian tech stocks have so far traded down on Friday morning. Notably, Japan’s Nikkei 225 fell by 1,866 points or 3.38%, while China’s Shanghai Composite was down 0.50%. Yesterday, U.S. tech stock markets also showed the same weakness, with the Dow Jones Industrial Average closing lower by 0.44%, while the S&P 500 and Nasdaq 100 were down over 0.25% each. The only exception was the Russell 2000 Index, which rose by 0.65%. 

Cryptocurrencies often mirror the trend followed by these tech stocks, as they both share a high sensitivity to liquidity and interest rate expectations.

Second, investors seem to be rotating to Gold, which jumped over 2% today as it moved back above $4,700, reinforcing its status as a safe-haven asset amid the broader macroeconomic and geopolitical uncertainty. Silver also saw significant interest, rising over 3% to $74.

Third, institutional demand in Bitcoin appears to have taken a breather. Data from SoSoValue show that U.S. spot Bitcoin ETFs have recorded net outflows for the past two days, with over $250 million flowing out.

While the outflows are relatively small considering the $1.16 billion in inflows they recorded over seven straight days just ahead of this shift, investors could take this as a sign of temporary exhaustion in the current rally.