KUALA LUMPUR, July 1 (Bernama) -- Bursa Malaysia’s benchmark index fell 0.43 per cent to close at its intraday low, reversing earlier gains as a wave of late-session selling erased the day's advances. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said the index traded in positive territory for much of the day before profit-taking intensified in the final minutes, reflecting investors’ cautious stance amid a lack of fresh market catalysts. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 7.23 points to 1,656.83 from Tuesday's close of 1,664.06. The benchmark index opened 1.29 points higher at 1,665.35 and climbed to an intraday high of 1,670.99 in the mid-morning session, before losing momentum in the final 10 minutes, dragging the index to its session low at the close. Market breadth was positive, with gainers outnumbering decliners 526 to 448, while 559 counters were unchanged, 1,088 untraded, and 14 suspended.
Key Takeaways
- Bitcoin fell to its lowest level in 21 months, pressured by expectations of higher US interest rates and persistent ETF outflows.
- More than US$4 billion exited US-listed Bitcoin ETFs in June, highlighting weakening institutional demand.
- Concerns over Strategy's future Bitcoin purchases have undermined confidence in one of the cryptocurrency's largest corporate supporters.
- Bitcoin has dropped over 50% from its record high and fallen below its 200-week moving average, reinforcing bearish technical sentiment.
- This week's US nonfarm payrolls report could become the next major catalyst for cryptocurrency markets.
Market Overview
Bitcoin extended its sharp decline on Wednesday, falling to US$57,742, its lowest level since September 2024, as investors continued to reduce exposure to risk assets amid growing expectations that the US Federal Reserve will keep monetary policy tighter for longer.
The cryptocurrency has struggled under the combined pressure of higher US Treasury yields, a stronger US dollar, and fading investor appetite for non-yielding assets. The latest decline comes after more than US$4 billion flowed out of US-listed Bitcoin exchange-traded funds (ETFs) in June, marking the largest monthly withdrawal since the products were introduced.
Fed Policy Remains the Key Risk
Investor sentiment has deteriorated following increasingly hawkish comments from Federal Reserve officials, including Chair Kevin Warsh, who reiterated the central bank's commitment to bringing inflation back to its 2% target.
Markets are now awaiting the upcoming US nonfarm payrolls report, which could reinforce expectations of higher interest rates if labour market conditions remain resilient. Such an outcome would likely strengthen the US dollar further and continue weighing on cryptocurrencies.
Strategy's Role Faces New Scrutiny
Another source of uncertainty stems from Strategy Inc., the world's largest corporate holder of Bitcoin.
While investors initially welcomed the company's revised capital allocation strategy, sentiment has shifted as the new framework provides greater flexibility to sell Bitcoin if necessary rather than maintaining its long-standing accumulation strategy. The change has raised concerns that one of Bitcoin's most consistent institutional buyers may become a less reliable source of demand.
Investment Outlook
Bitcoin has now fallen more than 50% from its all-time high above US$126,000 and has slipped below its 200-week moving average, a closely watched technical indicator often associated with prolonged bear markets.
With Federal Reserve policy, US economic data, and institutional fund flows remaining the primary drivers, cryptocurrency markets are likely to stay highly volatile in the near term. Long-term investors should closely monitor macroeconomic developments, as interest rate expectations continue to play a decisive role in shaping digital asset valuations.
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