Bitcoin traded near its lowest levels in 15 months on Wednesday, after a sharp selloff pushed the world’s largest cryptocurrency close to $73,000, amid heavy position liquidations and growing risk aversion across markets.

Bitcoin was last down 2.8% at $76,509.1 as of 01:56 a.m. US Eastern Time (06:56 GMT), after earlier falling to $73,004.3 — levels not seen since November 2024.

Following the weekend pullback, Bitcoin dropped about 12% last week, after losing 10% in the prior week.

This decline marks its lowest level since Donald Trump’s US presidential election victory, effectively erasing the gains that had been driven by optimism over a potential easing of regulatory restrictions on the cryptocurrency sector.

Bitcoin falls to a 15-month low amid broad liquidations

The drop was accompanied by large liquidations of leveraged long positions. Data from crypto analytics firm CoinGlass showed that nearly $740 million in bullish bets were liquidated over the past 24 hours, as falling prices triggered margin calls and forced traders to close positions.

Bitcoin’s weakness reflects a sharp reversal from the rally seen late last year, when the token surged following Donald Trump’s election victory.

At that time, investors moved into cryptocurrencies on expectations that the new US administration would adopt a more supportive regulatory stance toward digital assets. Bitcoin was also supported by US Federal Reserve rate cuts starting in December 2024, which boosted demand for higher-risk assets.

By contrast, gold and other traditional safe havens recovered on Wednesday amid escalating geopolitical tensions between the United States and Iran.

Crypto markets are also facing uncertainty over US monetary policy after Trump nominated former Federal Reserve governor Kevin Warsh to lead the central bank.

Warsh is widely viewed as hawkish, raising concerns about market liquidity.

Cryptocurrency prices today: Altcoins weaken and Cardano drops 6%

Most altcoins continued to underperform on Thursday, posting larger losses than Bitcoin.

Ethereum, the world’s second-largest cryptocurrency, fell 2.3% to $2,268.92.

XRP, the third-largest cryptocurrency, declined 1.1% to $1.59.

Oil prices rose on Wednesday after the United States shot down an Iranian drone and armed Iranian boats approached a US-flagged vessel, bringing fears of a potential escalation between Washington and Tehran back into focus ahead of expected talks between the two sides.

Brent crude futures climbed by $0.46, or 0.7%, to $67.79 per barrel by 10:34 GMT. US West Texas Intermediate crude rose by $0.52, or 0.8%, to $63.73 per barrel.

Both benchmark contracts have seen sharp swings this week between reports of talks aimed at easing tensions between the United States and Iran and growing concerns about possible disruptions to oil flows through the Strait of Hormuz.

At the same time, a broad selloff in equity markets — which often move in tandem with oil prices — limited crude’s gains.

PVM analysts said in a note that oil prices would have been lower if not for the renewed saber-rattling in the Middle East.

The US military said on Tuesday it had shot down an Iranian drone that approached a US aircraft carrier in the Arabian Sea in what it described as a hostile manner.

In a separate incident, shipping sources and a security consultancy said a group of Iranian armed boats approached a US-flagged oil tanker north of Oman. The United States and Iran are scheduled to hold talks in Oman on Friday, according to a regional official.

OPEC members — including Saudi Arabia, Iran, the United Arab Emirates, Kuwait, and Iraq — export most of their crude through the Strait of Hormuz, mainly to Asian markets.

Oil prices also drew support from industry data showing a sharp drop in US crude inventories. Stockpiles in the world’s largest oil producer and consumer fell by more than 11 million barrels last week, according to sources citing figures from the American Petroleum Institute.

Official data from the US Energy Information Administration is due at 15:30 GMT.

Analysts surveyed by Reuters had expected a build in crude inventories, in contrast to the industry figures.

In Tuesday’s session, oil prices were also supported by a trade agreement between the United States and India that boosted hopes for stronger global energy demand, while continued Russian attacks on Ukraine reinforced concerns that Russian oil could remain under sanctions for longer.

The US dollar edged lower against the euro on Wednesday amid uncertainty over the Federal Reserve’s policy path, after the release of key labor market data was delayed due to a partial US government shutdown.

At the same time, the Japanese yen was on track for a fourth straight daily loss against the dollar ahead of national elections, as Prime Minister Sanae Takaiichi seeks voter support for higher spending, tax cuts, and a new security strategy expected to accelerate defense capacity building.

The dollar had jumped on Friday after President Donald Trump selected former Federal Reserve governor Kevin Warsh to lead the US central bank when Jerome Powell’s term ends in May, easing fears that the Fed could shift toward an overly dovish stance.

Warsh has argued that productivity gains from artificial intelligence could justify a more flexible monetary policy, while also calling for a reduction in the Federal Reserve’s balance sheet. This policy mix would likely steepen the yield curve, but leaves the overall direction of interest rates uncertain.

Late Tuesday, Trump signed a spending deal into law, ending a four-day partial US government shutdown, but the crucial employment report that was due on Friday will be postponed.

Antje Praefcke, FX analyst at Commerzbank, said the market has already ruled out a Federal Reserve rate cut in March and is pricing only two cuts by the end of the year.

She added that labor market data in particular would need to come in weak to revive rate cut expectations and pressure the dollar again, regardless of whether Warsh is Fed chair or not, noting that the ADP report due later in the session is a weak predictor of the official jobs report.

The dollar index, which tracks the US currency against six major peers, was broadly steady at 97.33.

The euro rose 0.13% to $1.1833 ahead of the European Central Bank policy meeting on Thursday, with investors watching for any comments about the impact of the single currency’s strength on the policy outlook.

The euro hit a four-and-a-half-year high of $1.2084 last week, while policymakers expressed growing concern over the pace of its gains, warning that further strength could push inflation lower at a time when price growth is already expected to undershoot the ECB’s 2% target.

ECB Vice President Luis de Guindos said last summer that an exchange rate around $1.20 per euro is acceptable, but levels above that could become more problematic.

Analysts said recent moves in the euro/dollar pair have been driven almost entirely by dollar sentiment, while interest rate differentials have taken a back seat.

The British pound rose 0.2% to $1.3727 ahead of the Bank of England meeting on Thursday. Both the ECB and the Bank of England are widely expected to keep interest rates unchanged.

The Japanese yen fell 0.44% to 156.43 per dollar on Wednesday, its weakest level since January 23, when it had rallied sharply from 159.23 amid speculation about New York Fed rate testing operations.

Carol Kong, currency strategist at Commonwealth Bank of Australia, said a strong result for the Liberal Democratic Party would encourage Takaiichi to proceed with fiscal stimulus plans, raising risks of a higher government debt burden and putting pressure on Japanese government bonds and the yen.

Takaiichi had triggered a yen selloff earlier in the week after an election speech highlighting the benefits of a weaker currency. Although she later walked back those remarks, concerns remain that mixed signals from the prime minister could undermine efforts to support the fragile yen.

Elsewhere, the Australian dollar rose 0.2% to $0.7039 after a strong 1% gain in the previous session following an interest rate hike by the Reserve Bank of Australia.

The Chinese yuan briefly touched its highest level against the dollar in about 33 months, supported by firmer central bank guidance, although the daily fixing came in weaker than expected, which investors interpreted as an attempt to limit further gains.

The yuan continued to post steady gains on strong export performance. While analysts believe authorities will resist further appreciation, risks remain tilted to the upside, posing a potential test for China’s fragile economy.

Gold prices rose nearly 3% in European trading on Wednesday, extending their recovery for a second straight session from a four-week low, and recouping a large portion of the losses recorded during the historic selloff that hit precious metals on Friday and Monday.

Prices forcefully broke back above the key psychological level of $5,000 per ounce and are approaching $5,100, supported by safe-haven demand amid escalating geopolitical tensions between the United States and Iran.

Prices are also being supported by a weaker US dollar ahead of key US labor market data, which is expected to provide strong signals about the Federal Reserve’s interest rate path this year.

Price overview

Gold prices today rose 2.95% to $5,091.99, up from the session opening level of $4,946.06, with an intraday low of $4,910.17.

At Tuesday’s settlement, gold gained 6.1%, marking its first daily gain in four sessions and the biggest one-day rise since November 2008, after rebounding from a four-week low of $4,402.83 per ounce.

Gold lost about 13% over Friday and Monday combined during a historic wave of selling across precious metals markets, driven by easing concerns about Federal Reserve independence and after CME raised margin requirements on gold and silver futures.

Geopolitical tensions

Geopolitical tensions in the Middle East escalated after the US military announced on Tuesday that it had shot down an Iranian drone that approached the aircraft carrier Abraham Lincoln in what it described as a hostile manner while operating in the Arabian Sea.

US Central Command said the drone approached with hostile intent and unclear objectives while the carrier was about 500 miles from Iranian shores, ignoring repeated warnings and de-escalation procedures.

Iranian state media, however, described the flight as a routine and lawful reconnaissance mission in international waters, saying the drone successfully transmitted images and data before contact was lost.

US dollar

The dollar index fell 0.1%, extending losses for a second straight session and pulling back from a two-week high, reflecting continued weakness in the US currency against a basket of major and minor currencies.

Beyond profit-taking, the dollar is softening as investors refrain from building new long positions ahead of key US labor market releases that will offer clearer guidance on the Federal Reserve’s rate path this year.

Markets are still digesting President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair. The dollar had generally strengthened on expectations that Warsh would not move quickly toward rate cuts.

Investors also showed some relief as the nomination eased part of the concern about Federal Reserve independence following Trump’s repeated attacks on the central bank and current chair Jerome Powell.

US interest rates

According to the CME FedWatch tool, pricing for holding US interest rates unchanged at the March meeting stands at 85%, while the probability of a 25 basis point rate cut is priced at 15%.

To reprice these expectations, traders are closely watching a series of very important US labor market reports.

Later today, US private sector payrolls data for January will be released, followed by weekly jobless claims on Thursday.

Gold outlook

ANZ commodity strategist Soni Kumari said that after the sharp rally, a correction was expected and not surprising, and with gold rising again, the underlying fundamentals have not changed much, as the geopolitical and economic backdrop remains largely intact.

Goldman Sachs said on Wednesday that there are significant upside risks to its year-end gold forecast of $5,400, citing continued central bank accumulation and increased retail investor flows into gold exchange-traded funds.

Jigar Trivedi, senior research analyst at IndusInd Securities, said gold could reach $5,600 by the end of the first half of the year or by the end of April, and continue rising toward $6,000 per ounce by year-end.

SPDR fund

Holdings in the SPDR Gold Trust fell by 3.72 metric tons on Tuesday, bringing the total down to 1,083.38 metric tons.