Bitcoin dipped below $112,000 on Thursday, reflecting a broader sell-off in the cryptocurrency market along with traditional stocks. The leading cryptocurrency recorded a decline of about 2%, while other digital assets, including Ethereum and Solana, experienced more significant losses during this tumultuous week.
Ethereum fell roughly 5%, trading below $4,000, which marks its lowest level since August. This downturn was exacerbated by net outflows from Ethereum exchange-traded funds (ETFs) over the past 24 hours. Samer Hasn, a senior market analyst with XS.com, noted that the ongoing downward pressure in the market stems from a lack of adequate buying support following a massive wave of liquidations earlier in the week.
The market sentiment was further weakened by another round of long liquidations on Thursday. This week alone, over $1.6 billion in long positions were liquidated, causing anxiety among investors. Recent data compiled by CoinGlass highlights that approximately $511 million worth of positions were liquidated in the previous 24 hours across various crypto assets.
Stock markets have also begun to retreat from recent highs amid fears of market overextension driven by AI excitement and uncertainty regarding the Federal Reserve’s future interest rate decisions. Analysts have indicated that September has historically been a volatile month for crypto markets, but the subsequent months generally provide supportive conditions.
Adding to the market’s challenges, experts pointed to activities involving the Treasury General Account, which typically functions as the government’s checking account at the Federal Reserve. In recent weeks, the Treasury has been replenishing this account by issuing Treasury bills and bonds, effectively draining liquidity from the cryptocurrency sector. The redirection of cash into government debt may lower demand for higher-risk assets, including Bitcoin and other digital currencies.
The downturn in Bitcoin and Ethereum also impacted crypto-related stocks on Thursday. Trading platforms such as Robinhood and Coinbase saw their shares drop by more than 1%, while stocks from Bitcoin holder MicroStrategy and stablecoin issuer Circle also faced declines.
As the market grapples with these ongoing pressures, many investors remain cautious, closely monitoring both cryptocurrency dynamics and broader economic indicators.
