Bitcoin falls below $65,000 as macro fears rattle risk assets

Bitcoin fell 4.2% in 24 hours to $64,850 as of 14:00 UTC on May 19, as persistent macroeconomic risks pushed investors to reduce exposure to risk assets. The move mirrors a similar decline in gold, suggesting a broad-based flight to cash. Total trading volume in the last 24 hours was approximately $35 billion, according to CoinGecko data.

"The correlation between Bitcoin and gold in this downturn points to a classic macro-driven risk-off move," a researcher at blockchain analytics firm CryptoQuant said. "Investors are not discriminating; they are selling assets sensitive to interest rates and economic growth, and that includes both Bitcoin and traditional havens like gold."

The sell-off saw over $150 million in leveraged long positions liquidated in the last 24 hours, with the majority occurring on exchanges like Binance and OKX, according to data from Coinglass. Open interest in Bitcoin futures also dropped by eight percent to $32.5 billion, while funding rates turned slightly negative, indicating a reduction in speculative bullish positions.

The key level for traders to watch is the $64,000 support zone, which has held multiple times in the past month. A break below this could open the door to a deeper correction towards the $60,000 mark, as the market continues to price in a "higher for longer" interest rate environment from the U.S. Federal Reserve.

The pressure on Bitcoin is part of a wider trend affecting growth-sensitive assets. Technology stocks on the Nasdaq have also faced headwinds, with investors growing cautious about global demand. This environment has pushed the U.S. Dollar Index (DXY) higher, creating further headwinds for assets priced in dollars, including Bitcoin and commodities.

While gold is often seen as a safe haven, its price has also come under pressure, suggesting that investors are currently favoring cash above all else. The simultaneous drop in Bitcoin and gold challenges the narrative of Bitcoin as "digital gold," at least in the short term, as both assets are currently being treated as sources of liquidity.

Looking ahead, the market will be closely watching upcoming inflation data and central bank commentary for clues on the future path of interest rates. Until there is a clear signal of a pivot towards more accommodative monetary policy, risk assets like Bitcoin could remain under pressure. The next major resistance level for Bitcoin is seen at $68,000.

This article is for informational purposes only and does not constitute investment advice.