Bitcoin Prices Drop After Reaching Record Highs
Bitcoin, the biggest cryptocurrency by market value, has fallen below $108,000 after hitting a record high of more than $124,000 earlier this month. On Friday, August 29, Bitcoin traded around $107,500, down about 13% from its peak on August 13.
Experts say this kind of pullback is normal after a big rally.
- Mike Cahill, CEO of Douro Labs, explained that markets don’t move in straight lines. A 10–15% drop is common for Bitcoin, which trades 24/7.
- Doug Colkitt, from Fogo, added that many traders chased momentum when Bitcoin hit $124K. Once funding costs rose, the market naturally corrected.
Why Prices Fell
Analysts pointed to several reasons for the decline:
- Profit-taking by funds after Bitcoin’s big run-up.
- High funding rates in derivatives markets.
- Lower trading activity in August.
- Strength of the U.S. dollar and rising bond yields, which reduced appetite for risky assets.
- A slowdown in Bitcoin ETF inflows compared to earlier in the month.
Shift to Other Cryptos
Some investors are moving money from Bitcoin into other coins, especially Ethereum (ETH).
- Greg Magadini from Amberdata said funds are rebalancing into ETH because of its role in Web3, DeFi, and staking opportunities.
- ETH ETFs could also gain approval soon, which may attract more investment.
- Corporate treasuries are starting to add ETH alongside BTC.
Market Outlook
- Tom Bruni from Stocktwits noted that Bitcoin’s market dominance has fallen from 66% to 57% as money rotates into altcoins like Ethereum and Ripple.
- However, these altcoins face resistance at their 2021 highs.
- September is usually a weak month for risky assets, and Bitcoin has already lost support near $110,000. The next key level is $100,000.
- For Ethereum, traders are watching support at $3,900.
Looking ahead, traders are waiting for U.S. inflation and jobs data, as well as a possible Fed interest rate cut in September. If the Fed cuts rates, many expect altcoins like Ethereum and Ripple to rally strongly.
