As of the latest update, Bitcoin’s value has decreased by 5.5% within the past 24 hours, marginally outperforming the broader CoinDesk 20 Index, which saw a 6.1% decline. Concurrently, Ether (ETH) fell by 5.8%, Solana (SOL) by 10%, and XRP (XRP) also by 10%. Bitcoin’s recent peak above $70,000, its highest in over four months, has now become a distant memory.

Economic Indicators and Market Sentiment

Thursday morning brought ostensibly positive economic news, with the U.S. July ISM Manufacturing PMI falling significantly more than economists had anticipated, driving interest rates to multi-month lows. Additionally, U.S. initial jobless claims surged to their highest level in approximately a year. This combination of data fuels speculation that the U.S. might be on the verge of a monetary easing cycle by the Federal Reserve, which is typically perceived as bullish for risk assets, including Bitcoin.

Read more: Bitcoin Plunges Below $65K Amid Fed Meeting and Escalating Middle East Unrest

Following the Federal Reserve’s policy meeting, Chairman Jerome Powell suggested that a rate cut in September is plausible should economic growth and inflation continue to decelerate. In parallel, the Bank of England joined the monetary easing trend initiated earlier in 2024 by the Bank of Canada and the European Central Bank, reducing its benchmark lending rate for the first time in four years.

Political Influences on Bitcoin

The broader context reveals that Bitcoin’s surge to $70,000 on Monday was buoyed by the enthusiasm surrounding the Bitcoin 2024 conference in Nashville and GOP nominee Donald Trump’s pledge to support Bitcoin, even considering the possibility of the government holding the cryptocurrency as a strategic asset.

However, Bitcoin bulls must now reassess their positions in light of Trump’s diminishing victory prospects. Two weeks ago, his opponent was presumed to be Joe Biden, but with Kamala Harris emerging as the Democratic nominee-apparent, her election odds have climbed to 44%, according to Polymarket. Trump’s chances have waned to 55%, down from 70% two weeks prior. The potential impact of a Harris administration on Bitcoin and the broader crypto industry remains uncertain, but the likelihood of a crypto-friendly president in 2025 has seemingly diminished.