Cryptocurrency markets have seen sharp fluctuations in recent days, triggered by a series of inflation reports and the high-stakes meeting between Donald Trump and Xi Jinping. Bitcoin, which had held above the critical $80,000 level for a week, broke through this major support and recorded a significant pullback.
Shock drop in prices and leader cryptocurrencies’ performance
On Thursday morning Asia time, Bitcoin was trading at $79,200, down 2.3% in 24 hours and 2.2% in the past week. The break below $80,000 caught attention after a period of steady movements. Data from CryptoAppsy indicate that this drop in BTC shook investor confidence, with other leading cryptocurrencies also sustaining substantial losses.
Solana tumbled 5.6% to $90, nearly erasing gains from the previous two weeks. Ethereum slid 2.1% to $2,250, marking the weakest weekly performance among the majors after Bitcoin, with a 3% loss. Binance Coin declined by 1.6% to $660, although it managed to retain much of its weekly gains. XRP slipped 1.7% to $1.43. Dogecoin was the sole major cryptocurrency in positive territory, increasing by 0.9% to close at $0.1126.
Geopolitical turbulence shakes risk sentiment
The recent selling pressure across crypto markets can be traced to US President Donald Trump’s summit in Beijing with Chinese President Xi Jinping. This was the first official visit by a US president to China in nearly a decade, making it a historic event. During their talks, Xi emphasized the Taiwan issue, warning that any mishandling could lead to “conflict or greater tensions.”
China issued an official statement before the end of the meeting, sharing it with the public and highlighting the Taiwan issue, which rattled global risk sentiment.
The statement had a negative impact on global appetite for risk, especially in the crypto markets. Asian equity markets also reacted; the MSCI Asia Pacific Index, up 0.8% early in the session, closed down 0.1%. Mainland Chinese shares reached their highest point since 2021 ahead of the summit, but still ended the day 1.3% lower in overall terms.
Inflation data complicate Fed decisions
Sales pressure in cryptocurrency markets intensified further as US inflation data exceeded expectations. Producer price index figures released Wednesday showed a 1.4% monthly rise—well above the 0.5% forecast—and annual inflation reaching 6%. Tuesday’s consumer inflation numbers also climbed to 3.8%, the highest in three years.
These surprise inflation spikes make it harder for the Federal Reserve to cut rates by the end of the year. Hopes for supportive rate cuts, which have long underpinned sentiment across markets, are fading, denting long-term bullish expectations for digital assets.
Despite all this, enthusiasm for technology and AI-related investments pushed Asian stocks to new records. Nasdaq futures rose 0.2%, and Cisco shares surged 20% after sales projections exceeded expectations.
Looking ahead, the next key support for Bitcoin is now at $78,000, a low visited in early May. Should prices dip below this threshold, the sharp sell-off zone last seen at the end of April could come into play again. If Bitcoin manages to hold above this point, investor expectations will turn to upcoming macroeconomic data and developments following the recent international summit.
