Bitcoin is losing momentum after approaching record levels
The price of bitcoin has witnessed a noticeable decline over the past 24 hours, as it fell by up to 5% to reach around the levels of 118,000 dollars, after it had touched 122,500 dollars on Monday, recording its highest level since mid-July.
What are the reasons for this drop in the price of bitcoin
- Profit-taking operations by investors after a strong rise since the beginning of the year, as bitcoin has risen by 29% since January 2025.
- US inflation concerns ahead of the release of Consumer Price Index (CPI) data, which may affect the Fed's policy.
- A liquidation wave worth 461 million dollars in the futures market, mostly for long positions.
Ethereum holds up as altcoins witness a collapse
Unlike Bitcoin, Ethereum (ETH) remained stable at USD 4,300, recording a monthly rise of 45%, supported by strong institutional flows to its ETFs .
But many alternative currencies (Altcoins) have experienced sharp declines, including:
Ripple (XRP) fell to 2.3 USD (-3%).
Solana (SOL) and Avalanche (AVAX) lost between 6% and 7%.
Shiba Inu (SHIB) and Polkadot (DOT) were among the biggest losers.
The total market capitalization of cryptocurrencies decreased by about 70 billion dollars, stabilizing at 4.04 trillion.
What factors will determine the direction of the market soon
- US inflation report (CPI):
If the report shows an unexpected rise, the pressure on bitcoin may increase due to fears of tightening monetary policy.
While low inflation may lead to a recovery in the market, while strengthening hopes of lowering interest rates.
- Whale movements and institutional investors:
Cryptoquant data suggests that some large investors have started taking profits, which increases the selling pressure.
But the flows to bitcoin ETFs are still strong, which may support prices in the long term.
Ultimately, optimists view the current decline as a natural correction after a strong rally, especially given continued institutional demand.
Pessimists warn that macroeconomic risks (such as inflation and tariffs) could push Bitcoin further downward.
