Last week, Bitcoin and Ethereum experienced a significant drop in their prices. What triggered this sudden decline? Let's delve into the behind-the-scenes of a turbulent week in the cryptocurrency market.
Last week, Bitcoin lost nearly 4% of its value, falling from a record high of over $124,000 to approximately $107,000. Although volatility is a well-known characteristic of Bitcoin and other cryptocurrency, this sudden drop concerned many investors.
According to on-chain analyses, the initial trigger for this price drop appears to be an investor holding more than 100,000 bitcoins, a market “whale.” Last week, this investor began massively selling their holdings on exchange platforms like Hyperliquid, causing Bitcoin’s price to plummet from $114,000 to $108,600.
Fortunately, once this isolated event was identified, the market quickly stabilized and Bitcoin was able to recover much of its losses, reaching nearly $113,500 on Thursday evening.
Just as Bitcoin seemed to be recovering, a new threat emerged: the decline in artificial intelligence-related stocks. Leading companies such as CoreWeave, Marvell Technology, and NVIDIA published disappointing quarterly results, causing their stock prices to fall.
This decline in the AI sector led to a 1.32% drop in the Nasdaq, its most significant retreat since August 1st. And as Bitcoin has shown a strong correlation with the Nasdaq since June, its price also fell by 3.72%.
This episode illustrates how risk assets, including cryptocurrencies, are now interconnected with traditional financial markets.
Faced with this turbulence, analysts are divided on Bitcoin’s future. Some remain optimistic and predict a quick rebound, while others fear a further decline to $92,000.
However, this manipulation to push the monthly candle downward often signals an imminent rebound. Indeed, some whales push the price down to encourage traders to short the market, which typically results in a rapid short squeeze afterward.
Nevertheless, Bitcoin hasn’t yet broken out of its bearish trend until traditional markets show their direction tomorrow. A breakthrough above $109,500 would be a positive signal that buyers are taking control.
Bitcoin’s weaker momentum compared to Ethereum, which is attracting more investor attention, fuels this pessimism. Some experts like Tom Lee, president of Bitmine, even see Ethereum reaching $5,500 in the coming weeks, then $10,000-$12,000 by the end of the year.
Two major macroeconomic events this week the US Treasury bond auction and employment figures could also influence the cryptocurrency market in either direction.
Faced with this increased volatility, investors will need to exercise caution in the coming days. The close link between Bitcoin and global liquidity, as well as traditional stock markets, makes the cryptocurrency market more sensitive to turbulence.
The support at $105,148 will be crucial for bulls to defend. The demand zone between $106,300 and $105,000 could serve as a bounce area for Bitcoin in case of a deeper correction. Otherwise, it will return to a minimum of $102,000.
On the same topic:
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
DISCLAIMER
This article is for informational purposes only and should not be considered as investment advice. Trading cryptocurrencies involves risks, and it is important not to invest more than you can afford to lose.
InvestX is not responsible for the quality of the products or services presented on this page and cannot be held liable, directly or indirectly, for any damage or loss caused by the use of any product or service featured in this article. Investments in crypto assets are inherently risky; readers should conduct their own research before taking any action and invest only within their financial means. This article does not constitute investment advice.
Risk Warning : Trading financial instruments and/or cryptocurrencies carries a high level of risk, including the possibility of losing all or part of your investment. It may not be suitable for all investors. Cryptocurrency prices are highly volatile and can be influenced by external factors such as financial, regulatory, or political events. Margin trading increases financial risks.
CFDs (Contracts for Difference) are complex instruments with a high risk of rapid capital loss due to leverage. Between 74% and 89% of retail investor accounts lose money when trading CFDs. You should assess whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Before engaging in financial or cryptocurrency trading, you must be fully informed about the associated risks and fees, carefully evaluate your investment objectives, level of experience, and risk tolerance, and seek professional advice if needed. InvestX.fr and the InvestX application may provide general market commentary, which does not constitute investment advice and should not be interpreted as such. Please consult an independent financial advisor for any investment-related questions. InvestX.fr disclaims any liability for errors, misinvestments, inaccuracies, or omissions and does not guarantee the accuracy or completeness of the information, texts, graphics, links, or other materials provided.
Some of the partners featured on this site may not be regulated in your country. It is your responsibility to verify the compliance of these services with local regulations before using them.
