Bitcoin fell to its lowest level in nearly four months, pressured by a broader market downturn linked to escalating Middle East tensions, before staging a recovery from those lows.

The sharp price swings indicate Bitcoin is finding support around the $63,000 mark, a key level closely monitored by traders, according to Damien Loh, Chief Investment Officer of Ericsenz Capital. He noted that many investors had previously bet on further declines, and those positions were quickly unwound as the price began to rise.

It was a punishing week for the cryptocurrency, with Bitcoin shedding roughly 13% of its value. The selloff was triggered when MicroStrategy Inc., the digital asset treasury company led by Michael Saylor and one of Bitcoin's largest buyers in recent years, sold a small portion—around $250 million worth—of its massive holdings. While the sale was relatively minor, it unsettled the market.

Josh Du, Chief Investment Officer of Animoca Brands, explained that the price decline this week stemmed from MicroStrategy breaking its perceived "never sell" promise, which shook market confidence.

This episode highlighted a divergence between Bitcoin and technology stocks, with the cryptocurrency falling even as tech shares hit new highs. Since reaching a record above $126,000 in October last year, Bitcoin has surrendered about half of its market value.

Bitcoin remains vulnerable to macroeconomic risks. Prices extended losses following overnight airstrikes that threatened a temporary U.S.-Iran peace agreement, coinciding with declines in Asian equities and U.S. stock index futures during Thursday trading in Singapore.

Smaller cryptocurrencies faced similar pressure. Ethereum, the second-largest digital asset, dropped to its lowest point since April 2025 before rebounding alongside Bitcoin in the afternoon session.

Data from CoinGlass shows that approximately $1.3 billion worth of bullish bets were liquidated over the past 24 hours, with Bitcoin positions leading the losses.

Market-compiled data indicates investors have withdrawn a net total of nearly $4.4 billion from U.S.-listed spot Bitcoin exchange-traded funds (ETFs) over 13 consecutive trading days, marking the longest streak of outflows on record.