Bitcoin fell more than 10%, just 72 hours from 70K

Bitcoin (BTC) continued its sharp pullback after a swift start to the week, with the price having retreated to a two-week low at $62,700.

At the time of reporting, bitcoin was down 5.5 percent over the past 24 hours, outpacing the 6.1 percent decline in the broader CoinDesk 20 index. Ethereum (ETH) is down 5.8%, Solana (SOL) is down 10%, and XRP is down 10%. About 72 hours ago, Bitcoin hit a new high in more than four months, just above $70K.

The market received nominally positive news on Thursday morning when the US ISM manufacturing index for July came in well below economists' expectations, causing interest rates across the board to fall to multi-month lows. In addition, the number of Americans filing for unemployment benefits climbed to its highest level in about a year. Taken together, these data reinforce the view that the Fed is about to enter a monetary easing cycle, which is generally considered positive for risk assets, including Bitcoin.

After yesterday's Fed policy meeting, Fed Chairman Jerome Powell said there was a very high chance of a rate cut in September if data continued to point to slowing economic growth and inflation. Separately, the Bank of England on Thursday joined the monetary easing program begun by the Bank of Canada and the European Central Bank in early 2024, cutting its benchmark lending rate for the first time in four years.

Looking back at the big picture, Bitcoin's surge above $70,000 on Monday was set against the backdrop of excitement at the Bitcoin 2024 conference in Nashville, as well as Republican presidential candidate Donald Trump's pledge to support bitcoin and even consider government-held bitcoin as a strategic asset.

What Bitcoin bulls need to consider now, however, is that Trump's chances of winning the election are less favorable than they were two weeks ago, when he was running against Joe Biden. New Democratic presidential candidate Kamala Harris' odds have risen steadily throughout the week and now stand at 44 percent. Mr Trump's chance of winning the election has fallen to 55 per cent, compared with 70 per cent two weeks ago.

Whether the Harris administration will crack down on bitcoin and cryptocurrencies as hard as the Biden administration remains to be seen, but the odds of a new industry-friendly president expected in 2025 have declined.