Bitcoin traded around $57,000 during the European morning, following a pullback from the $60,000 resistance level on Thursday, a decline of 2.4% in the last 24 hours. The CoinDesk 20 Index (CD20) fell 2.3%. Bitcoin climbed above $59,000 on Thursday after the U.S. reported its first drop in consumer prices in four years, a positive sign for the prospect of an interest-rate cut by the Fed. Bitcoin's failure to maintain a sustained rally, despite positive macro news, suggests there is more price weakness ahead.

Iris Energy's Childress, Texas site is well suited for the company's focus on bitcoin mining even if analysts have determined it unsuitable for AI, Bernstein said in a report. IREN shares fell almost 14% on Thursday following a short-selling report by Culper Research which pointed out the site's flaws as a potential hub for AI and high-performance computing (HPC) purposes. “Iris Energy has not claimed it intends to retrofit its bitcoin mining site in Childress to AI,” Bernstein analysts led by Gautam Chhugani wrote. The broker estimates 65% of the company's value is derived from bitcoin mining and the remaining 35% from AI/HPC. Iris Energy’s current $1 million/megawatt capital expenditure metric is a reflection of bitcoin mining capex, the broker said. Comparing it to AI/HPC capex is not meaningful.

Partior, a blockchain payment joint venture of banking giants JPMorgan, DBS and Standard Chartered, has raised $60 million in Series B funding. The investment was led by Peak XV Partners with contributions from Valor Capital Group and Jump Trading Group. Partior aims to establish unified blockchain-based interbank payment rails for instant clearing and settlement. Using blockchain-based technology to expedite such banking processes is now fairly commonplace. JPMorgan's Onyx network has settled hundreds of billions of dollars of transactions since going live a few years ago. Last month, Fidelity used Onyx to tokenize shares in a money market fund.

There is hope for bitcoin bulls, despite its retreat following a positive U.S. inflation report on Thursday.

The daily chart MACD histogram, an indicator used to gauge trend strength and changes, is teasing a crossover above zero, a sign of an impending bullish shift in momentum.

The supply overhang from the German state of Saxony, which catalyzed the price drop early this month, is nearly running dry. Additionally, it remains uncertain what percentage of the 95,000 BTC, a big chunk of the bitcoin set to be distributed to Mt. Gox creditors, will be liquidated.

"The prospect of some of the $16.3 billion FTX repayment over the next months translating into buying pressure, the increasingly positive stance toward crypto on both sides of the aisle, and the potential of an interest rate cut in September benefiting risk assets more generally should embolden medium- and long-term bulls," crypto prime broker FalconX said on Friday.

FalconX added that potential selling by Mt. Gox's creditors may have a different profile than Saxony's sales. "For example, maybe more flow will go to exchanges versus professional liquidity providers, or maybe a more diversified holder base will out sales over time," FalconX noted.

- Omkar Godbole