Chips Rally, Yen Wilts, Oil Bites: Bitcoin's Two-Week High Hits a Midweek Speed Bump 🪙

Bitcoin retreated from a one-month high on Wednesday, slipping below $66,000 to trade near $65,900 after touching a two-week high of about $66,300 earlier in the session. The pullback came as WTI crude prices topped $85 per barrel for the first time since June 12 amid the escalating Iran conflict, reigniting inflation concerns that have weighed on risk assets for much of the year. Nasdaq 100 and S&P 500 index futures both declined, while gold climbed 0.95% to $4,118 and silver gained 1.2% as investors rotated into traditional havens. The safety bid was visible inside crypto as well, with bitcoin's dominance rising to 59% as capital moved out of altcoins and stablecoins into the relative safety of $BTC.

The week began with bitcoin climbing to about $65,500 on Tuesday, a two-week high, as the semiconductor selloff that dragged crypto lower the previous week reversed and Asian chip stocks led a broad risk rally. The largest cryptocurrency rose 1% on the day and 5% on the week, with roughly $33 billion changing hands. $ETH, the stronger of the two majors, reached $1,922, up 3% on the day and 8% over seven sessions. $XRP added 3% to $1.13 and was up 6% on the week, $SOL rose 2% to $78, $BNB held at $574 and dogecoin was flat. Hyperliquid's $HYPE gained 4% to $63 but remained the only major token underwater over the week.

Wednesday's momentum carried over from a chip-driven session, with bitcoin holding near $66,300 and a 24-hour range of roughly $65,400 to $66,900. $ETH traded near $1,935, up 3% on the week, while $XRP added 2% to $1.14 and $TRON edged up. The day's laggard was $HYPE, down 4% to $60 and off 10% over seven sessions. MSCI's Asia Pacific equities gauge rose 1%, extending Tuesday's biggest one-day gain in a month, with South Korea's Kospi jumping 5% as a leveraged-position unwind that had pulled the benchmark nearly 30% off its peak appeared to be ending. Samsung and SK Hynix led the move, following a more than 5% jump in a U.S. semiconductor gauge on Tuesday that clawed the index back out of technical bear-market territory. The Chinese AI shock that hit these same stocks less than a week ago, including bitcoin, has fully reversed.

Adding a fresh dimension to the macro picture, the Japanese yen slid past 163 per dollar for the first time since 1986, extending a decline that Japanese intervention has failed to halt. Finance Minister Satsuki Katayama said authorities remain ready to take "bold steps" as needed, per Bloomberg, but a strengthening dollar, higher U.S. Treasury yields and oil rising on the Iran conflict have overwhelmed those efforts. On Tuesday, oil had briefly pulled back, with Brent falling 1% to about $88.58 after Iran said mediators were circulating proposals to ease hostilities, including a reported suggestion for a 10-day halt in strikes.

The rally has been underpinned by a five-day streak of inflows into U.S. spot bitcoin ETFs totaling more than $600 million, the most sustained institutional buying since mid-July and a reversal of the eight-week outflow run that ran through late June. "Current bitcoin and ether prices are low but fair, given the macro uncertainties pervading markets," said Jeff Mei, chief operating officer at BTSE. Market activity slowed over the past 24 hours, with trading volume dropping 12% to $150 billion and open interest static around $116 billion. The 24-hour long/short ratio stood at 50.59/49.41, a tighter and more indecisive reading than a day ago, while the 24-hour tally of liquidations totaled $165 million.