Bitcoin and Ether Struggle Amid Market Turbulence

NEW YORK, N.Y. — The cryptocurrency market plunged this week as economic concerns led to over $500 million in forced sell-offs of long positions.

Bitcoin’s price fell 2% to $115,255.70, after briefly touching $124,496 last week. At one point, it dropped to $114,706. Ether also saw a decline, sliding 4% to $4,283.15, just shy of its near-record of approximately $4,800.

The downturn followed comments from the Federal Reserve that raised doubts over a potential rate cut in September. This announcement sparked profit-taking among investors and triggered a wave of liquidations in the crypto market, with a total of $552.58 million in sales from 131,455 traders, as reported by Coin Metrics.

The data indicated that approximately $123 million in long bitcoin positions and $178 million in long ether positions were liquidated. These sell-offs occur when traders must sell their assets quickly to pay off debts, causing further price declines.

Investors faced additional challenges after Treasury Secretary Scott Bessent announced that bitcoin forfeited to the government would be used under a plan initiated by former President Donald Trump in March, further rattling market confidence.

The broader crypto market also suffered, with the overall index down 3.7%. Crypto-related stocks were under pressure, with ether treasury stocks decreasing by 6% and other companies falling by around 3%. Meanwhile, crypto exchange reports showed a similar slump.

As the week progresses, investors are watching economic indicators closely ahead of the Fed’s upcoming policy meetings. Particularly, traders are eager for data on jobless claims, which is set to be released Thursday.

Despite last week’s surprising price peaks for bitcoin and ether, many expect a pullback rather than a crisis-driven selloff. Analysts suggest that the support from crypto exchange-traded funds (ETFs) and companies focused on accumulating bitcoin and ether is helping to stabilize the market. While ETFs saw net outflows on Friday, they recorded significant weekly inflows of $547 million for bitcoin and $2.9 billion for ether, marking a record inflow week for ETH funds.