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Zhitong Finance APP learned that Bitcoin is facing pressure from a round of risk aversion in the global market, which has caused the largest digital asset to suffer its biggest weekly drop since the collapse of the FTX exchange in 2022.

The cryptocurrency fell more than 11% on Monday, falling below the $54,000 mark. In the seven days ending last Sunday, Bitcoin fell 13.1%, the biggest drop since the FTX bankruptcy. Smaller tokens such as Ethereum and Dogecoin also suffered significant losses.

The cryptocurrency’s decline came as a global stock market sell-off deepened, reflecting concerns about the economic outlook and questions about whether heavy investments in artificial intelligence can live up to the hype surrounding the technology. Geopolitical tensions in the Middle East are also rising, adding to investor unease.

On August 2, the U.S. Bitcoin ETF suffered its largest outflow in about three months. The digital asset also fell below its 200-day moving average price.

The latter technical indicator “opens the way for a deeper correction” toward $54,000, IG Australia Pty market analyst Tony Sycamore wrote in a note.

Since hitting a record high of $73,798 in March, Bitcoin has been hit by a host of factors, including shifting political fortunes in the United States, where Trump, a Republican who supports cryptocurrency, and his Democratic rival, Vice President Harris, who has yet to detail her policy stance on digital assets, are squaring off in the presidential race.

Also hanging over the market is the risk that bitcoin seized by governments could be sold off, and that tokens returned to creditors through bankruptcy proceedings could lead to an oversupply.

Bond traders are increasing bets that the U.S. will cut interest rates starting in September to support economic expansion. Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors LLC, believes that the recent turmoil in traditional markets "increases the likelihood of less restrictive monetary policy sooner rather than later - which is a good thing for cryptocurrencies."

Bitcoin’s gains have slowed to around 25% so far this year, compared with an 18% gain in gold and a 9% gain in a global stock market index.