The market just saw a notable shift. Bitcoin investors sold off their holdings after the digital asset hit a new record last week. Ethereum dropped even harder. It gave back most of its recent gains, moving away from its 2021 peak.
This investor selling at record price levels triggered the market’s slide. Bitcoin fell 7% from its all-time high of $124,000 just last Thursday. Ethereum has taken a bigger hit, losing 5.5% today. It is now further from its 2021 high. Broader economic data also reduced interest in risky assets. Everyone is now watching the Federal Reserve’s event in Jackson Hole.
Bitcoin (BTC) has pulled back 7% since reaching its record price. It touched over $124,000 last Thursday. This happened as lower prices spread across the entire cryptocurrency market.
This week started on a down note for the market. Bitcoin now sits around $115,000. It has fallen 2.5% in the last 24 hours. It also dropped 3.5% over the past week. These figures come from CoinGecko data as of this writing.
Ethereum (ETH) also took a hit. It is the second-largest cryptocurrency by market value. ETH recorded a loss of over 5% for the day. It fell to a low of $4,250 before a small recovery. This correction happens as investors massively took profits. Broader economic worries also dampened recent enthusiasm.
Last week, ETH had gained significant ground. It got close to $4,800. It almost touched its 2021 all-time high. Strong demand from institutions and corporations fueled this rise. Ether exchange-traded funds (ETFs) saw a new weekly record for inflows. They attracted $2.8 billion. This led all global crypto ETF activity.
However, the current pullback has dragged the total value of the cryptocurrency market down. It is now below $4 trillion. According to CoinMarketCap data, it sits at about $3.9 trillion.
This market shift seems to be caused by several factors. Investors locked in profits when prices hit new records. Also, US economic data sparked inflation fears. This lessened hopes for upcoming interest rate cuts this year.
Profit-Taking Hits the Market
Data from Glassnode, reported by various news outlets, shows investors took profits. They pulled out about $3.5 billion over the weekend. A large $3.3 billion came on Saturday alone. This was the highest amount since July.
This selling wave follows a pattern seen throughout 2025. Bitcoin has mostly stayed above $90,000 since the start of the year. Only about 10 trading days recorded net losses.
“Bitcoin’s recent fall shows careful investor sentiment,” said Vincent Liu. He is the Chief Investment Officer at Kronos Research. Liu spoke to The Block. He pointed to US inflation being higher than expected. The producer price index (PPI) rose 3.3% yearly in July. This was above forecasts.
“Higher inflation reduces hopes for Federal Reserve rate cuts,” Liu added. “It also strengthens the dollar. This makes investors less willing to take risks.”
Despite the correction, many analysts see more market strength. Drops from all-time highs this year are getting smaller. Bitcoin fell 30% in January, then 12% in May. July saw a 9% drop, and August is at 8%. Rachael Lucas, an analyst at BTC Markets, noted spot ETF flows. She said capital is moving around, not that trust is collapsing. Some funds like Grayscale and Ark Invest saw money leave. But lower-cost products like BlackRock’s IBIT gained funds.
Technical Signals Show Weakness
From a technical view, Bitcoin is in a tricky spot.
Omkar Godbole, a CoinDesk analyst and Chartered Market Technician, observed something. He said the price has broken below an upward trendline. This line stretched from the lows of April. A bearish candle pattern formed on Friday. The weekly stochastic oscillator also turned downwards. It moved from the overbought zone (above 80). This suggests more possible price declines.
On the weekly chart, BTC could not settle above $122,056. This is a key level based on the Fibonacci golden ratio. It also failed to hold gains above a historic resistance point. That point links the bull market peaks of 2017 and 2021.
“Overall, these technical signals point to a growing risk of further downside for BTC in the short term,” Godbole noted in a Monday report. He warned Bitcoin might test the $111,982 level. This is a key support to watch now.
The 200-day simple moving average is around $100,000. This is another important support level to keep an eye on. If prices recover above $118,600, the bearish argument could weaken. Resistance levels are at $120,000, $122,056, and $124,429.
For Ethereum, the fall below $4,300 shows a similar trend. It is partly driven by its link to Bitcoin. The token had looked strong last week. This was thanks to companies quickly buying Ethereum for their balance sheets. But widespread selling pressure has reversed some of those gains.
Upcoming Volatility and Economic Events
Experts agree that major economic news will be the next market driver. All eyes are on the Federal Reserve’s Jackson Hole symposium this week. A positive tone there could reignite investor appetite for risk. Also, US jobless claims data is due on August 21. That report will be key for judging the health of the US economy.
The US Treasury Secretary ruled out direct government Bitcoin purchases. He prefers “budget-neutral” methods. Still, large institutional investments and company allocations could provide a floor of support. Metaplanet and Strategy announced new BTC purchases this Monday.
In summary, this market correction seems like a temporary pause in the upward trend. But hidden downside risks still remain. Investors are in a “neutral” state, says CoinMarketCap’s Fear and Greed Index. They are waiting for clear signals that will decide the next market move. Meanwhile, the crypto market shows immediate volatility. Liquidations rose above $580 million in the past 24 hours. Coinglass provided this data.