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A Bitcoin image. / Reuters, Yonhap

Bitcoin has been moving sideways around $63,000 for a week following its recent sharp decline. Market analysts suggest that fading expectations for a US interest rate cut, capital outflows from spot Bitcoin exchange-traded funds (ETFs), and a shift of capital toward artificial intelligence (AI) stocks are capping the digital asset's upside. Experts view whether Bitcoin can hold the $60,000 support level as the biggest variable in the short term.

According to US cryptocurrency exchange Coinbase on the 12th, Bitcoin was trading at $63,700 as of 1:30 PM, up a modest 1.56% from the previous day. It has remained trapped in a $63,000 box pattern for a week, a figure that represents a steep 21.56% plunge compared to a month ago.

Market observers attribute the recent loss of upward momentum to institutional capital flight. According to digital asset management firm CoinShares, global crypto investment products saw hundreds of millions of dollars in net outflows last week. The exodus was heavily concentrated in Bitcoin investment products, dampening investor sentiment.

The recent migration of capital into the US stock market is also identified as a factor putting pressure on Bitcoin prices. Analysis indicates that as the equity market rallies on the back of AI chips and mega-cap tech stocks, the appeal of the cryptocurrency market—a relatively riskier asset class—has diminished.

Macroeconomic uncertainties also persist. As the US Federal Reserve maintains a cautious stance on cutting its benchmark interest rate, appetite for risk assets remains constrained. The market is keeping a close watch on upcoming inflation metrics and the trajectory of monetary policy.

Experts projected that the $60,000 mark will serve as a critical support zone in the near term. Geoff Kendrick, head of digital assets research at Standard Chartered, noted in a recent report, "While the potential for increased short-term volatility remains, institutional demand is holding steady, which should lift Bitcoin prices toward the end of the year," adding that "the current correction is closer to a breather within a broader bull market."

Markus Thielen, founder of 10x Research, explained, "If Bitcoin settles below the $60,000 support level, selling pressure could intensify," warning that "if investor sentiment continues to deteriorate, a further slide into the high-$50,000 range cannot be ruled out."

On-chain metrics, however, appear relatively stable. Massive sell-offs by long-term holders remain limited, and inflows into exchanges have not surged dramatically, leading some to view the current phase as a healthy consolidation period within a bull market. A crypto industry insider remarked, "For the time being, Bitcoin is highly likely to be swayed by US monetary policy and ETF fund flows," adding that "whether it defends the $60,000 line will be the ultimate watershed determining either a renewed rally or further declines."

                                                                                                               Kim Min-ju