Pressure mounts once more as Bitcoin hits new heights
In a recent development, the world's largest cryptocurrency, Bitcoin, has experienced a correction following its all-time high of $124,517 last Thursday. This downturn can be attributed to a combination of technical liquidation events, macroeconomic uncertainty, and strategic whale behavior.
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The correction has seen Bitcoin's price drop to more than 7% below its all-time high, with one Bitcoin worth $115,237 on Monday morning. This drop follows a long-term upward trend for Bitcoin, having increased over 70% since Donald Trump's election in November last year and nearly octupling in value since autumn 2022.
Key reasons behind the downward trend include $500 million+ leveraged long liquidations that drove a sharp price drop from $124,000 to around $115,744 after critical support levels were broken, triggering forced selling by traders using leverage. Fed policy uncertainty around the Jackson Hole Economic Symposium, where investors awaited cues from Fed Chair Jerome Powell about future interest rate paths, increased market nervousness and selling pressure. Whale wallets began selling Bitcoin to rotate into Ethereum, adding selling pressure on Bitcoin. A $400 billion liquidity drain from the U.S. Treasury General Account (TGA) and a possible shift in Federal Reserve monetary policy represent macro risks weighing on Bitcoin and the broader crypto market.
Despite short-term selling, whale wallets still accumulated over 218,000 BTC during the correction, indicating some longer-term buying interest at lower levels between $110,000-$113,000. This acts as a strategic entry zone for investors looking to buy or add to their positions.
Technical analysis suggests that Bitcoin’s medium and long-term uptrend remains intact, supported by moving averages and overall bullish momentum. However, short-term fatigue and neutral momentum have resulted in price consolidation and temporary pullbacks after the recent high.
Future developments may include stabilization in the current $110,000-$113,000 range as whales and institutions absorb selling pressure, setting a floor for price. Potential rebounds if key support holds, though a break below $110,000 could risk deeper corrections. Continued volatility tied to macroeconomic events and Fed policy decisions is expected, especially as markets interpret signals from follow-up Fed meetings beyond Jackson Hole. If Ethereum continues to attract whale accumulation, some rotational selling pressure on Bitcoin may persist, impacting near-term price action.
Despite the correction, the fundamentally positive outlook for Bitcoin and many altcoins remains unchanged. Some profit-taking in Bitcoin and altcoins is neither surprising nor cause for concern. Longer-term bullish outlook remains strong, with expert predictions still targeting $150,000 to $200,000+ by the end of 2025 based on technical and fundamental factors.
Several events this week could influence Bitcoin's further development, including inflation data from Europe, the release of the FED meeting minutes, and the annual Jackson Hole central bank symposium. It is important for investors to stay informed and cautious during these times.
Boerse Medien AG has an indirect stake in nxtAssets GmbH, the issuer of the nxtAssets Bitcoin direct ETP and nxtAssets Ethereum direct ETP.
Investors can take advantage of the "Bitcoin Direct ETP" and "Ethereum Direct ETP" from NxtAssets, which allow for easy investment in Bitcoin or Ethereum, similar to buying a stock. The downturn in Bitcoin's price, following its all-time high, has provoked some opportunities for technology-oriented finance investors who are looking to invest at strategic entry points like the $110,000-$113,000 range.
