- Bitcoin posts worst first half since 2022
- Geopolitical risks and Fed uncertainty weigh on sentiment
- Strategy sales and Strategic Bitcoin Reserve hurdles unsettle crypto traders
- CLARITY Act misses July 4 target – deadline shifts to August
Investor sentiment deteriorates – recoveries stay short-lived
The pillars underpinning the digital asset ecosystem appear to be coming under increasing pressure, with the world's largest cryptocurrency posting its worst first-half performance in four years. Bitcoin entered H2 2026 near $58,000, down more than 52% from its October 2025 record high of $126,163. Between January and June, the cryptocurrency lost nearly 28%, marking one of its weakest first-half performances on record.
Several forces combined to push the market lower through the first half. ETF outflows created a $4.4 billion supply overhang as institutional demand weakened, while the Fed's higher-for-longer stance reduced the appeal of non-yielding assets. At the same time, capital rotated into AI-related equities, Strategy's decision to permit Bitcoin sales raised concerns over additional supply, reports of billion-dollar gains from President Trump's crypto ventures drew increased scrutiny, and delays to the market structure bill, the CLARITY Act, undermined confidence in the regulatory outlook. Geopolitical tensions further weighed on sentiment by fuelling inflation concerns and reducing appetite for risk-sensitive assets such as cryptocurrencies.
More pressure for markets ahead of Fed minutes and as industry risks persist
Against this backdrop, Bitcoin continues to face headwinds from several fronts. Muted ETF demand remains a drag on sentiment, with US spot Bitcoin ETFs recording net inflows of just $214.7 million over the past three sessions, offering little relief after a prolonged outflow streak.
Meanwhile, expectations surrounding the Trump administration's pro-crypto agenda, including plans for a Strategic Bitcoin Reserve, are being re-tested as uncertainty persists over the reserve's structure, oversight and legal authority. Adding to the uncertainty, the CLARITY Act missed its July 4 target, with the Senate expected to revisit the legislation on August 7 as lawmakers seek to keep the bill on track for a 2026 enactment.
The focus now turns to Wednesday's release of the Fed minutes from the June meeting, with investors looking for clues on the interest-rate outlook. Any indication that rates may remain elevated for longer could keep pressure on Bitcoin and the broader cryptocurrency market.
Geopolitics in focus for now - Bitcoin tumbles further after Trump says is ceasefire over
Moreover, geopolitical developments are adding to the cautious mood. Bitcoin extended its losses after President Trump stated that the ceasefire with Iran was over following renewed hostilities between the two sides. The remarks intensified risk-off sentiment at a time when markets were already digesting the impact of recent US strikes on Iranian targets and renewed restrictions on Iranian oil exports, prompting investors to scale back exposure to risk-sensitive assets, including cryptocurrencies.
Technical Outlook – Bitcoin struggles to hold above 60,000 and the key 200-week SMA
After failing to overcome resistance near $65,000, BTCUSD extended its decline, falling to an intraday low of $61,300. Notably, the cryptocurrency has spent the past five sessions hovering around the 200-week SMA, a level closely monitored by traders as a gauge of the long-term trend. A sustained break below this region could reinforce bearish sentiment and expose the psychological $60,000 level, followed by the yearly low near $57,775.
That said, the RSI is currently stabilising below the neutral 50 mark, suggesting consolidation may continue in the near term. Thus, should buyers regain control, resistance is seen at 65,500, followed by the 20-week SMA near $70,500.