Bitcoin continued its decline on Friday, falling toward $62,500 as traders warned that a weak weekly close could trigger further losses.
BTC/USD dropped around 1.3% to $62,570 during Friday’s Wall Street session, bringing the cryptocurrency close to its lowest level of August. The decline came even as US stocks remained near record highs, highlighting Bitcoin’s recent weakness compared with traditional risk assets.
Trader and analyst Rekt Capital warned that Bitcoin needs to reclaim $63,220 by Sunday’s weekly close to avoid a potential breakdown. According to the analyst, a weekly close below that level could increase selling pressure.
The $63,000 area has increasingly struggled to hold as support during August. Bitcoin is also facing resistance around its 50-month exponential moving average (EMA) near $65,827, adding to concerns over its short-term outlook.
Market analysts are also watching the potential for increased liquidations if Bitcoin falls toward the $61,000 liquidity zone. Glassnode said traders have taken on significant risk, with much of the positioning concentrated in long positions despite limited matching demand.
Meanwhile, improving US inflation data has failed to provide Bitcoin with the boost investors expected. US equities continued to perform strongly, with the S&P 500 and Nasdaq Composite both trading higher.
Attention is now shifting toward the US Personal Consumption Expenditures (PCE) inflation report due on August 26. The PCE index is closely watched because it is the Federal Reserve’s preferred inflation gauge.
For Bitcoin, the upcoming weekly close and the $63,220 level could therefore prove crucial in determining whether the current decline remains contained or develops into a deeper correction.
