Following a nearly flat close on Wednesday, Bitcoin trended downward amid rising volatility. After trading for most of Tuesday in a range between $63,300 and $63,500, the asset briefly spiked overnight, reaching $63,900 around 1:25 AM Eastern Standard Time (EST).
However, roughly two hours later, Bitcoin began to decline, pushing its price back below $63,400. Shortly thereafter, the leading cryptocurrency repeated this pattern: after rising to $63,900, it again gave up its gains during another wave of selling. However, unlike the first round, at 12:44, Bitcoin dropped to $62,912, reducing its market capitalization to $1.26 trillion. Although it quickly recovered to the $63,000 level, the digital asset remained down 0.5%.
Bitcoin's elevated volatility on Thursday led to an increase in liquidations. Long positions accounted for nearly $34 million of the total volume, more than $13 million higher than the day before. Across the broader cryptocurrency market, liquidation volume reached $227 million, with $122 million from long positions and approximately $105 million from short positions.
Bitcoin's price action diverged from that of U.S. stock indexes, which traded with modest gains. Stocks found support from falling oil prices as well as strong profit and revenue reports from major equipment and chip manufacturers.
Some economists attribute the stock market rally—including the S&P 500's rise to yet another record high on August 13—to the slight decrease in the U.S. Consumer Price Index in July. Combined with weakening labor market indicators, favorable inflation data appears to give the Federal Reserve more leeway to consider cutting interest rates by autumn.
However, institutional research indicates that overall macroeconomic conditions had changed noticeably by July 2026. According to a macroeconomic analysis by AMINA Research, the global monetary policy context had become significantly less conducive to rate cuts, as central banks leaned toward holding rates steady or even considering further tightening.
The report highlighted that geopolitical tensions around the Strait of Hormuz had led to a temporary spike in energy prices, exacerbating inflationary risks and causing a split within the Federal Reserve regarding monetary policy: at the July 29 meeting, three regional Fed presidents dissented, arguing for a quarter-percentage-point rate hike.
Although a lasting ceasefire in the Middle East would simplify the Federal Reserve's path forward, the likelihood of a breakthrough in the near term remains low—especially given reports that both the U.S. and Iran are preparing for further escalation of the conflict. The prolonged uncertainty surrounding the Strait of Hormuz bodes poorly for Bitcoin, which still lacks the macroeconomic catalyst needed to kickstart a recovery and successfully close out the second half of the year.
