Markets on Edge: Bitcoin Retreats, Metals in Turmoil as Asia Trading Week Begins
A wave of volatility swept through financial markets at the start of the Asian trading week, as last week's dramatic collapse in precious metals continued to unsettle investors and spill over into cryptocurrencies and equities. With a dense calendar of corporate earnings, central bank meetings, and economic releases ahead, traders adopted a defensive stance.
Bitcoin, the flagship cryptocurrency, retreated to around $75,000 in early hours, dipping from levels above $76,000 seen in thin weekend trading. The move brings it back to a support zone last tested during the market turbulence following former President Donald Trump's imposition of sweeping "Liberation Day" tariffs last year, highlighting ongoing sensitivity to macro risks.
Equity markets in Asia broadly mirrored the nervous sentiment. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7%, with South Korea's KOSPI leading losses, down 1.0%. The decline tracked weaker futures for Wall Street, as traders weighed the implications of the commodity shock and positioned for a heavy data and earnings flow.
Japan proved a notable exception. The Nikkei 225 index advanced 0.7%, buoyed by opinion polls suggesting a strong electoral showing for Prime Minister Sanae Takaichi's Liberal Democratic Party in the upcoming lower house election. Market participants view a potential landslide victory as a green light for continued large-scale fiscal stimulus and policies that could keep the yen subdued, benefiting export-oriented stocks.
The commodity space remained a primary source of anxiety. Silver extended its historic rout, plunging another 5% at one point after Friday's approximate 30% crash—its worst single-day loss on record. The violent move triggered a unwind of leveraged bets in what had become an overcrowded trade. Gold also struggled to find footing, remaining under pressure after its sharpest daily decline since 1983 on Friday.
In energy markets, oil prices slipped nearly 3%. The drop followed weekend comments from Donald Trump suggesting Iran was "seriously talking" with Washington, which traders interpreted as reducing the immediate likelihood of a U.S. military strike. Iran's geopolitical stance remains a key swing factor for global crude supplies and prices.
Currency markets added another layer of complexity. The U.S. dollar held firm after Trump nominated Kevin Warsh, a former Fed governor, to lead the Federal Reserve. Markets perceive Warsh as potentially less inclined toward aggressive interest rate cuts and more focused on reducing the central bank's balance sheet, a stance generally supportive of the dollar.
Looking ahead, European and U.S. equity futures pointed to a soft open. S&P 500 futures were down 0.2%, while Nasdaq futures fell 0.4%, as investors awaited earnings from tech giants like Alphabet and Amazon, and scrutinized the outlook for AI investment after Microsoft's recent results received a lukewarm reception.
This corporate earnings focus converges with pivotal central bank meetings. The Reserve Bank of Australia, European Central Bank, and Bank of England are all set to convene, with money markets assigning about a 75% probability of a 25-basis-point rate hike from the RBA as it battles resurgent inflation.
The economic data docket in Asia includes S&P Global manufacturing PMI readings for Japan, South Korea, and Taiwan, alongside inflation figures from Indonesia and Pakistan. Markets in Malaysia were closed for a holiday.
Kenji Tanaka, Portfolio Manager in Tokyo: "The metals meltdown was a stark reminder of how quickly leverage can amplify a correction. It's forced a broad-based risk reassessment. While Japan's political outlook provides a local tailwind, the global picture is dominated by central bank uncertainty and whether tech earnings can justify current valuations."
Sarah Chen, Independent Retail Trader in Hong Kong: "It's absolute chaos. One minute silver is the 'new digital gold,' the next it's crashing 30%. Bitcoin getting dragged down with it shows everything is correlated when panic hits. The algorithms are just feeding on this volatility, and the little guys get squeezed out."
David Miller, Chief Economist at Orion Capital, Singapore: "This week is a crucial stress test for markets. We're seeing the divergence between region-specific factors, like Japan's election, and overarching global themes—disinflation in commodities, shifting Fed expectations, and peak AI euphoria. How assets price this mix will set the tone for Q3."
Riya Kapoor, Fintech Analyst in Mumbai: "The Bitcoin pullback is healthy and expected after its massive run. It's finding support at a key technical and psychological level. The real story is the breakdown in the traditional 'safe-haven' narrative for metals, which could have longer-term implications for portfolio diversification strategies."