Crypto market corrects, what's next?
The crypto market correction continues unabated.
The crypto market correction continues unabated. Total market cap fell 1.5 percent to around four trillion dollars. Even within the top-10, all coins were in the red on a daily basis.
Bitcoin (BTC) fell 2.2 percent, Ethereum (ETH) declined 1.7 percent, and Dogecoin (DOGE) shed 3.4 percent. At press time, Bitcoin traded at $112,605, about 9.3 percent below its all-time high.
The cause is largely due to profit-taking in the so-called summer doldrums. Historically, August is the weakest month for Bitcoin. On top of that came a chain reaction of liquidations that put further downward pressure on prices. Just yesterday, BTC long positions worth $225 million were liquidated, a rise of 1,929 percent versus the day before. The total outstanding derivatives contracts rose 15 percent to $983 billion, fueling volatility further.
With the drop, the 38% Fibonacci level at $112,000 comes into view. A convincing break below would accelerate the downward spiral.
Demand side momentum is also waning. Bitcoin demand fell from a peak of 174,000 BTC in July to only 59,000 BTC today—a two-thirds retreat.
Institutional buyers are pulling back as well. Net ETF inflow over the past 30 days was only 11,000 Bitcoin, the lowest since April 25. And Strategy (MSTR), typically an aggressive accumulator, limited itself in the past month to 27,000 BTC, far less than the record buildup of 171,000 in November 2024.
With diminishing inflows, high liquidations and historically weak seasonal patterns, the question now is: can Bitcoin hold at $112,000, or is the next leg in the correction ahead?
