Bitcoin Faces Intense Downturn Amid Ongoing Market Volatility
By: Isha Das
The cryptocurrency market witnessed a significant downturn recently, with Bitcoin leading the charge as nearly $200 billion was wiped off the market. This decline has rekindled anxiety among crypto investors, primarily due to escalating trade tensions between China and the United States. Bitcoin, which had just started to regain strength after a previous massive liquidation, again struggles to maintain its position above critical resistance levels. As of the latest reports, Bitcoin has experienced a 3% drop, landing at approximately $110,500.
The broader crypto market reflected Bitcoin's turmoil, as other major cryptocurrencies like Ethereum and BNB also took significant hits, seeing reductions of 4% and 12%, respectively. This market-wide decline was fueled by China's announcement of new sanctions on U.S. subsidiaries of South Korea's Hanwha Ocean, heightening the longstanding trade disputes between Beijing and Washington. The decision threw the crypto market into disarray, exacerbating existing vulnerabilities.
The pressure on Bitcoin has not eased, as the price continues to waver between $110,000 and $108,000, according to Timothy Misir, Head of Research at BRN. Experts suggest that breaking below this range could spell further decline toward $104,000. Conversely, reclaiming the $115,000 threshold could steady its momentum, potentially paving the way for a rise to $125,000. Meanwhile, institutional investors remain cautious, reflected in the daily outflows from Bitcoin and Ethereum ETFs, amounting to roughly $755 million combined.
Counter to recent extreme crash scenarios like those seen in 2022 with the LUNA and FTX collapses, the current market behavior appears leverage-driven, according to Glassnode. Their analysis indicates that this decline occurred while a majority of investors were still in profit, highlighting a structurally different scenario. Despite the uncertainty, experts like Misir remain cautiously optimistic that a consistent ETF inflow above $500 million could indicate a market recovery, emphasizing that any further advancements will rely heavily on genuine spot demand rather than speculative trading.
