TLDR
- Bitcoin and major altcoins dropped over 5% in 24 hours as $15 billion in Bitcoin and Ethereum options expired
- Over $400 million in crypto positions were liquidated, mostly affecting long positions in Bitcoin and Ethereum
- Federal Reserve uncertainty grew after inflation data suggested rate cuts may be delayed
- NVIDIA earnings warning about slowing AI investment growth dragged down tech stocks and crypto markets
- Bitcoin formed bearish technical patterns including a rising wedge and double top formation
The cryptocurrency market experienced widespread declines today, with Bitcoin falling to $108,000 and most major altcoins dropping over 5% in the past 24 hours. The total crypto market capitalization fell 3.3% to $3.76 trillion as selling pressure mounted across digital assets.
Bitcoin led the decline, dropping from recent highs near $115,000. Ethereum followed suit, falling to $4,337 as the broader market turned bearish. Popular altcoins including XRP, Cardano, Dogecoin, and Sui all posted losses exceeding 5%.
The selloff coincided with the expiry of Bitcoin and Ethereum options contracts worth over $15 billion. Options expiries have historically created volatility in crypto markets, often leading to sharp price movements as traders adjust their positions. Market makers typically hedge their exposure ahead of these events, which can amplify selling pressure.
Liquidations accelerated the decline, with over $400 million in crypto positions forced to close in the past day. Long positions in Bitcoin and Ethereum bore the brunt of the liquidations as prices fell below key support levels. Leveraged traders found themselves caught on the wrong side of the market move.
Large wallet movements added to the selling pressure. A Bitcoin wallet from the Satoshi era moved 80,201 BTC worth approximately $9.6 billion, creating additional supply in an already weak market. These whale movements often signal major selling activity that can push prices lower.
Federal Reserve Policy Concerns
Federal Reserve policy uncertainty played a key role in the market decline. Recent inflation data showed prices remained elevated, raising questions about the central bank’s timeline for interest rate cuts. Jerome Powell had previously hinted at potential rate reductions during his Jackson Hole speech, citing a slowing labor market.
However, economic data released this week painted a different picture. Second-quarter GDP growth came in at 3.3%, showing the economy remained robust. Friday’s inflation report reinforced concerns that price pressures persist, potentially delaying any Fed action.
The disconnect between market expectations and economic reality created uncertainty. Investors had positioned for more aggressive rate cuts, but the data suggests the Fed may take a more cautious approach. This shift in expectations weighed on risk assets including cryptocurrencies.
Tech Stock Weakness Spreads
NVIDIA’s latest earnings report contributed to the broader market weakness. While the chip giant reported 53% revenue growth to $46 billion and projected third-quarter revenue above $50 billion, management warned of slowing growth in AI investment spending. The company noted that corporate clients were beginning to scale back their infrastructure investments.
NVIDIA’s stock decline pulled down major tech indices including the Nasdaq 100 and S&P 500. The weakness in tech stocks often spills over into cryptocurrency markets, as both sectors attract similar risk-seeking investors. When tech stocks fall, crypto assets frequently follow.
Technical Analysis Points Lower
Bitcoin’s chart structure has turned bearish according to technical analysts. The cryptocurrency formed a rising wedge pattern on weekly charts, which typically signals further declines. A double top formation on daily charts reinforced the bearish outlook.
The Fear and Greed Index, which measures market sentiment, dropped to 39, indicating “fear” among investors. This marked a sharp decline from neutral or greedy readings earlier in the month. Trading volumes surged as sellers dominated the market.
Bitcoin now faces a test of the $100,000 psychological support level. A break below this level could trigger additional selling and pull the broader crypto market lower. Some tokens like PYTH and Solana showed relative strength, but the overall trend remained bearish.
