Bitcoin plunged 10.71% to $64,481.08 over the past 24 hours, spearheading a sweeping market sell-off rooted in a synchronized macroeconomic downturn.
The move underscored Bitcoin’s deepening integration with traditional financial markets, exhibiting a striking 91.6% correlation with the S&P 500 and a 79.4% correlation with gold—evidence that liquidity and interest rate expectations are now dominant cross-asset drivers. Rather than acting as a digital safe haven, Bitcoin behaved unequivocally as a risk asset during this episode of broad-based stress.
The primary catalyst was a macro-driven risk-off rotation, mirrored by a 2.21% drop in the S&P 500 and a sharp 6.57% decline in gold. This alignment signals that shifting investor sentiment around monetary policy and global liquidity conditions triggered a unified retreat from leveraged positions across both conventional and digital asset classes. Compounding the pressure, a violent liquidation cascade erupted in the derivatives market, wiping out over $1.03 billion in positions—a 230% surge from the previous day—with longs accounting for 89% of the forced selling.
This deleveraging spiral intensified downward momentum just as Bitcoin breached a critical technical threshold: the 78.6% Fibonacci retracement level at $63,047.05. The breakdown was confirmed by a 110% spike in trading volume, cementing a bearish shift in near-term market structure.
Despite the prevailing pessimism—reflected in a Fear & Greed Index reading of just 5—the extreme oversold condition raises the possibility of a tactical rebound. If Bitcoin stabilizes above the $63,047 support, a relief rally toward the $67,020 level (the 50% Fibonacci retracement) could unfold. Conversely, a decisive break below this floor would likely open the path to $60,074, the recent swing low.
Market participants should closely monitor U.S. equity futures for directional cues and watch whether spot Bitcoin ETFs, now holding over $100 billion in assets under management, attract institutional buying capable of absorbing selling pressure.
For now, sellers remain in control, but volatile, two-sided price action is probable as the market digests this macro-led correction.
Source:: Tethered to Tradition: Bitcoin’s Sharp Drop Reveals Deepening Ties to S&P 500 and Gold