Bitcoin (BTC) briefly fell to $57,000 the previous week, marking a new year-to-date low, but trended broadly higher this week. The first half of the week saw choppy price action following a large sell-off by a DAT company, but BTC was subsequently bought back on the strength of rising US equities and easing concerns over the Middle East, recovering to the $64,000 range as of this writing.
From the night of July 6 into the morning of July 7, BTC saw sharp swings exceeding ¥500,000 in both directions on a yen basis. The decline was triggered by an announcement from US-based Strategy that it had sold a total of 3,588 BTC—worth roughly $216 million, or about ¥35 billion—between June 29 and July 5.
The sale came just after the company unveiled its "Digital Credit Capital Framework" treasury strategy on June 29, and disappointment selling spread across the market. For investors who had been counting on continued accumulation by DAT companies, the sale raised concerns about the durability of corporate demand.
Once the selling ran its course, however, rising US equities—along with favorable remarks about Bitcoin from Donald Trump—helped support the market. In addition, reports that US Bitcoin DAT company Strive had purchased an additional 17.76 BTC the previous week drove the liquidation of short positions that had been betting on further declines, and BTC rebounded.
Toward the latter half of the week, easing concerns over the Middle East provided a further tailwind. Oil prices fell on expectations that negotiations toward ending hostilities between the US and Iran would continue, which appears to have softened investors' risk-averse stance.
Falling oil prices could improve the profitability of Bitcoin miners by lowering electricity costs. If selling pressure from miners' BTC holdings eases, this could also support the market on the supply-demand front.
This week, the Bitcoin market was temporarily destabilized by the large sell-off from a DAT company, but it found support from rising US equities, additional corporate purchases, receding geopolitical risk, and lower oil prices. The rebound from the previous week's year-to-date low remains intact.
