Bitcoin’s price has plunged to its lowest point since July, falling to around AU$168,000 (US$109,214), primarily due to profit-taking by investors and a wave of economic and political uncertainties. Market sentiment has decreased significantly, impacted by diminished expectations of a September interest rate cut and recent actions by former President Donald Trump to dismiss Federal Reserve Governor Lisa Cook. This change in political dynamics has only added to the market’s volatility.
According to crypto analyst Rachael Lucas from BTC Markets, the price correction can be attributed to profit-taking, technical resistance, and changing expectations about interest rates. Bitcoin’s brief rally to US$117,000 last Friday came to an abrupt halt, with the subsequent lower high signalling reduced momentum. Notably, this downturn saw over AU$230 million (US$150 million) wiped from long positions, marking one of the largest liquidation events since late 2024, as highlighted by analytics firm Glassnode.
Triggering further selling pressure was a significant sale of 23,000 BTC, valued at approximately AU$4 billion (US$2.6 billion), which resulted in additional liquidations across crypto derivative markets.
Adding complexity to the market’s situation is Trump’s controversial move to remove Governor Cook, accusing her of mortgage fraud—a claim she vocally denies. The situation could lead to a prolonged legal battle that may ultimately involve the US Supreme Court.
In contrast to Bitcoin’s struggles, Ethereum (ETH) has witnessed remarkable inflows into its exchange-traded funds (ETFs), attracting US$443.9 million (AU$684 million) in a single day, which is more than double the inflows of its BTC counterparts. This trend signals persistent institutional interest in Ethereum, as observed by Lucas in her commentary.
Ethereum also recently reached a new all-time high, briefly exceeding AU$7,500 (US$4,900) before retracing to around AU$6,900 (US$4,500). Crypto analyst Ben Cowan has forecasted a significant rotation back into Bitcoin following Ethereum’s peak, predicting a BTC correction in September followed by recovery and growth in October.
The market is abuzz with speculation regarding the future trajectory of both Bitcoin and Ethereum. Analysts like Swyftx’s Pav Hundal also foresee a potential BTC correction followed by a robust end to the year, likely catalysed by ETH achieving new all-time highs.
As the market grapples with intertwined economic, political, and technical factors, investors remain cautious yet observant of potential opportunities in light of shifting dynamics.
In summary:
– Bitcoin’s price has dropped to AU$168,000, influenced by profit-taking and growing uncertainty in the economic landscape.
– Political maneuvers, including Trump’s attempts to dismiss Fed Governor Cook, have further weakened market confidence.
– Ethereum ETFs have seen significant inflows, indicating continued institutional interest amid Bitcoin’s downturn.
– Analysts predict a BTC correction in September, potentially setting the stage for a strong market rebound in October.
