Bitcoin slumps to 21‑month low following ETF outflows and rate fears
Bitcoin slid to its weakest level in nearly two years on Wednesday, weighed down by persistent outflows from exchange‑traded funds and renewed expectations of higher U. S. interest rates.
1st July 2026 – (New York) Bitcoin slid to its weakest level in nearly two years on Wednesday, weighed down by persistent outflows from exchange‑traded funds and renewed expectations of higher U. S. interest rates. The world’s largest cryptocurrency fell as much as 1. 5 per cent during Asian trading, touching $57,742 — its lowest point since 17th September 2024 — before trimming losses later in the Singapore session. At the time of writing, it was trading close to $58,700, down about 2 per cent over 24 hours. The latest decline leaves Bitcoin more than 50 per cent below its record peak above $126,000 reached in October last year. It has also slipped beneath its 200‑week moving average, a long‑term technical indicator often associated with extended bear markets. The token last breached that level three years ago. Market sentiment has been undermined by hawkish rhetoric from U. S. Federal Reserve officials. At his first press conference as Fed chair last month, Kevin Warsh stressed that the central bank would not tolerate persistently high inflation, fuelling expectations that borrowing costs may remain elevated. Cleveland Fed President Beth Hammack told CNBC on Tuesday that further rate rises could be required to return inflation to the 2 per cent target. Higher rates tend to draw capital towards yield‑bearing assets and the US dollar, reducing the appeal of non‑yielding assets such as cryptocurrencies. Analysts say this shift has become a significant headwind. Tony Sycamore of IG Australia noted that changing rate expectations and dollar strength have placed Bitcoin under mounting pressure, adding that the upcoming US non‑farm payrolls report could intensify selling if it reinforces a hawkish policy outlook. Investor withdrawals from US‑listed spot Bitcoin ETFs have compounded the weakness. More than $4 billion was pulled from such funds in June, the heaviest monthly outflow since their launch two years ago. Data from K33 show that five‑day net flows fell by 34,267 BTC last week, marking the second‑largest five‑day outflow on record. K33 suggested that quarter‑end portfolio rebalancing could provide short‑term support, noting that ETF flows have diverged from broader market trends around month‑end in several instances over the past 18 months. Periods of Bitcoin underperformance against the S&P 500 have at times been followed by stronger ETF inflows as investors adjusted allocations. However, the firm cautioned that the pattern has not been consistent enough to serve as a dependable signal. Additional uncertainty has emerged around Strategy Inc. , one of the largest corporate holders of Bitcoin. While investors initially welcomed the company’s strengthened liquidity position — including a $2. 55 billion cash reserve and extended dividend coverage — attention has shifted to its newly introduced Bitcoin monetisation programme. The initiative permits sales of up to $1. 25 billion worth of Bitcoin to meet obligations and fund share buy‑backs, raising concerns that a major source of demand could become a potential seller. Strategy currently holds 847,363 BTC, and analysts warn that any sizeable disposals could weigh further on market confidence. Wintermute analysts described the current environment as indicative of an advanced phase of a bear market, citing depressed sentiment readings and a growing proportion of coins held at a loss. The firm argued that thin summer trading volumes may limit the scope for a decisive bottom, with further downside possible into September or October depending on broader macroeconomic conditions.