Bitcoin's Brief Rebound Fails as Markets Shift Focus Back to Macro

Bitcoin's brief rebound above $65,000 on Monday has been short-lived. The cryptocurrency dropped back down to around $63,000 by Tuesday, leaving it 3% lower over the past day.

The decline followed a geopolitical relief rally that saw markets react positively to reports of paused military strikes between the US and Iran. This led to increased crude oil prices falling and US equities opening higher, causing risk assets like cryptocurrencies to rise.

However, investor attention soon shifted back to macroeconomic developments, particularly ahead of the Federal Reserve's latest policy decision. Treasury yields remained elevated, and expectations for interest rates to stay high continued to weigh on risk assets.

Data from derivatives markets showed more than $156.8 million worth of Bitcoin positions were liquidated over the past 24 hours, with approximately $133.5 million in long positions being closed out. This suggests that leveraged bullish traders accounted for most of the forced selling.