Bitcoin (BTC) Faces Challenges Amid Global Economic Turmoil

The cryptocurrency market has been experiencing significant turbulence, with Bitcoin (BTC) facing challenges amid global economic turmoil. According to Bitfinex Alpha, panic selling and forced liquidations have swept across major exchanges, pushing Bitcoin's price down by over 11.5% from its May high. Long liquidations alone surpassed $400 million for three consecutive days, indicating a sharp reversal in market sentiment.

Market Volatility and Institutional Inflows

The total crypto market experienced liquidations exceeding $2.6 billion, with altcoins like Ethereum (ETH) and Solana (SOL) witnessing declines of over 20%. Despite the volatility, Bitcoin spot ETFs recorded net inflows of $1.02 billion, highlighting growing institutional interest. This demand has helped stabilize Bitcoin's price within a wide range of $94K to $110K, even as derivatives markets underwent significant deleveraging. The future trajectory of Bitcoin will depend on sustained ETF inflows or a potential shift in market sentiment.

Global Economic Factors

Global economic factors are also impacting the cryptocurrency market. The Federal Reserve maintained steady interest rates in June, expressing concerns over slowing economic growth and persistent inflation. Fed Chair Jerome Powell cautioned that tariffs could lead to a "meaningful" increase in consumer prices, reinforcing the Fed's cautious approach.

Geopolitical tensions, particularly in the Middle East, have further rattled global oil markets. Disruptions around the Strait of Hormuz, a vital oil route, have led to increased freight costs and falling tanker activity, signaling market anxiety. Rising oil prices could exacerbate inflation concerns, complicating central banks' monetary policies.

Retail and Political Developments

On the consumer front, May retail sales showed a slight decline, driven by reduced spending on cars, fuel, and dining out. However, core retail sales growth suggests resilient discretionary spending. Businesses, anticipating tariff hikes, have increased wholesale inventories since late 2024. As retailers restock at higher costs, a second wave of inflation could emerge, potentially delaying the Federal Reserve's rate cuts.

In the political arena, former U.S. President Donald Trump's financial disclosures revealed over $600 million in income from crypto ventures, including the $TRUMP coin and World Liberty Financial. His involvement in crypto, real estate, and global branding has sparked ethical concerns.

Internationally, Vietnam has passed a landmark law granting legal status to crypto assets starting in 2026, aiming to attract blockchain innovation. Meanwhile, Iran's largest exchange, Nobitex, suffered a politically motivated cyberattack, highlighting the increasing intersection of crypto and global conflicts.