Bitcoin Dips Below $63K as Asian Session Leverage Flush and Hawkish Fed Jolt Markets

Market Overview

Bitcoin slipped below $63,000 during the Asian session, triggering a minor leverage flush. The sell-off was relatively modest, with liquidations running at about one-sixth of the worst levels seen over the past 30 days, according to CoinGlass.

Key Drivers

Fed's Hawkish Stance

Fed Governor Chris Waller signaled that a rate hike could be imminent if inflation data remains hot. "If we get another hot reading on core inflation this week, then the FOMC will need to consider tightening monetary policy in the near term," Waller said. The two-year Treasury yield surged to a new multi-year high of 4.27%, while the 10-year yield jumped to 4.6%.

Geopolitical Tensions

Renewed U.S. airstrikes on Iranian targets and President Trump's reinstatement of the "Iranian Blockade" sent oil prices up 8.5% to a one-month high of $77.50 per barrel. This added to risk-off sentiment across markets.

AI and Chip Stock Rout

Data center and AI-related stocks tumbled. SK Hynix crashed 15%, dragging South Korea's Kospi down 9% and triggering a trading halt. Bitcoin miners pivoting to AI, such as MARA Holdings, Riot Platforms, and CleanSpark, fell about 5%.

Bitcoin ETF Inflows

Despite the sell-off, Bitcoin ETFs recorded their first weekly inflows in nine weeks, attracting roughly $197 million. This followed eight consecutive weeks of outflows totaling billions.

BIP-110 Governance Debate

Charles Schwab views the BIP-110 debate as a governance dispute that could create short-term volatility but is unlikely to threaten the network. The proposal would restrict non-financial data on Bitcoin, including Ordinals and Runes, but currently has less than 1% miner support.

Corporate Moves

• Strive (ASST) added 18 BTC last week, bringing total holdings to 19,900 coins.
• Bitmine Immersion (BMNR) increased its ETH stake to 5.77 million tokens.
• Strategy (MSTR) raised $467 million in cash via stock sales, with no changes to its 843,775 BTC holdings.

Outlook

All eyes are on the June CPI report due Tuesday, expected to show a decline in headline inflation. The Fed's July 28-29 meeting will be crucial for determining the direction of risk assets, including crypto and chip stocks.