The cryptocurrency market took a hit on Monday, with bitcoin falling sharply after touching a new all-time high last week. Economic concerns and a wave of forced sales have shaken investor confidence, leading to big drops in major digital assets.
Sharp Falls in Bitcoin and Ether Prices
Bitcoin traded at $115,255.70, down 2% from recent levels, after dipping as low as $114,706. This comes just days after it soared to a record $124,496. Ether, the second-largest crypto, slid 4% to $4,283.15, pulling back from near its own high of about $4,800.
The broader crypto market also suffered, with the CoinDesk 20 index dropping 3.7%. Stocks tied to crypto, like Bitmine Immersion and SharpLink Gaming, fell 6% and 3%, respectively.
Liquidation Wave Hits Traders Hard
Over the last 24 hours, more than 131,000 traders faced forced sales totaling $552.58 million. This included $123 million in bitcoin long positions and $178 million in ether longs wiped out as prices fell and profits were taken.
Economic Factors Fuel the Downturn
A tougher economic backdrop, including higher-than-expected July inflation numbers, has sparked doubts about a Federal Reserve interest rate cut in September. The collapse of big players like FTX and Terra has added ongoing pressure to bitcoin’s value this year.
Government Stance on Bitcoin Reserves
Treasury Secretary Scott Bessent stated that the U.S. strategic bitcoin reserve, set up by President Donald Trump in March, will only include bitcoin seized by the government. He mentioned looking into ways to add more without extra costs.
Looking Ahead: Fed Meetings and Market Trends
Investors are watching the Federal Reserve’s Jackson Hole symposium and upcoming jobless claims data for clues on future moves. Despite the dip, some see these pullbacks as normal cooldowns, helped by strong inflows into crypto ETFs—$547 million for bitcoin funds and a record $2.9 billion for ether last week.
August has historically been weak for markets, so caution may linger until the September Fed meeting, even with growing interest from big institutions and companies.
