Bitcoin at $108,000: What's behind the crypto market decline?
What's the story
The cryptocurrency market is witnessing a wave of volatility, with Bitcoin and Ethereum prices taking a hit. As of Wednesday morning, Bitcoin was trading at around $108,326, down 4% for the week. Meanwhile, Ethereum was hovering near $3,866 after a decline of over 6% in the past week. The dip comes after October's massive "flash crash," which wiped out more than $19 billion in leveraged positions—the largest single-day liquidation in crypto history.
Market analysis
Geopolitical tensions continue to impact cryptocurrency market
Edul Patel, CEO of Mudrex, explained the current market situation. He said Bitcoin tried to break past the $114,000 resistance mark but retreated toward $108,500. "The market remains fragile due to limited macro cues and ongoing geopolitical uncertainty," he added. However, Patel also hinted that upcoming US Consumer Price Index (CPI) data could be a turning point for cryptocurrencies like Bitcoin and Ethereum.
Market impact
Flash crash aftermath: Digital assets struggle to regain momentum
The flash crash earlier this month saw Bitcoin plummet by some 15% to $104,600 while Ethereum fell over 20% to around $3,500 before a slight recovery. Since then, digital assets have struggled to regain momentum as traders remain cautious amid persistent volatility. CoinSwitch's Markets Desk noted that Bitcoin eased toward $108,000 after failing to hold gains near $114,000. This was partly due to capital rotation away from gold which dropped more than 5% from recent record highs.
Market trends
Inflows return for Bitcoin ETFs after brief pause
Despite the recent downturn, spot crypto trading volumes have surged to nearly $240 million in the last 24 hours. Bitcoin ETFs witnessed inflows of $266 million while Ethereum ETFs added about $99 million. This suggests a renewed accumulation after a pause in the market. According to CoinSwitch, Bitcoin has firm support near $108,000, with resistance at $111,000-$113,000. A breakout above this range could trigger fresh upward momentum for cryptocurrencies like Bitcoin and Ethereum.