Bitcoin just surged to $107,000 a few days ago but then quickly fell back to $102,000, resulting in nearly $700 million in liquidations in one day, most of which were losses for those betting on a decline. The market is like a patient with a 'high fever'; indicators show that short-term gains have gone too far, and now a pullback is normal. Everyone's emotions are like a roller coaster; just a few days ago, they were 'madly buying,' but now they realize the money hasn't kept up, and as the heat decreases, the price can't hold up.
The U.S. and China are at odds over tariffs (for example, the U.S. raising taxes), causing concerns that a trade war may return. Although China has lowered interest rates and reserve requirements, the economy might be 'cold and bloated' (things are expensive but the economy isn't growing), scaring people into selling risk assets. The Federal Reserve claims it may lower interest rates, but in reality, it is dragging its feet, making the dollar even more valuable. With high bank interest rates, fewer people are speculating on cryptocurrencies, and large funds are rushing to buy gold for safety.
Many people are borrowing money to speculate on cryptocurrencies (for example, Bitcoin futures positions exceed 50 billion), and when prices drop, they face liquidations, which leads to more forced liquidations, like a domino effect. Even large institutions are starting to sell: over 900 coins were withdrawn from Bitcoin ETFs in one day, and Ethereum ETFs sold 18,000 coins in a week, indicating that some people are taking their profits and leaving, or simply watching from the sidelines.
The 'magic' of Bitcoin halving has failed. Originally, in April, the Bitcoin halving was expected to reduce new coin production by half, which historically would lead to a price increase. However, this year faces high interest rates and regulatory pressure that have offset the benefits, and the price has not followed the script.
Large institutions are secretly bottom-fishing; giants like BlackRock are still buying Bitcoin through ETFs. When the price drops to around 100,000, long-term holders have instead increased their positions by 28,000 coins, indicating that 'veterans' feel this price is a bargain. Even countries are joining the fray: El Salvador treats Bitcoin as national reserves, effectively giving Bitcoin an 'official certification', boosting confidence.
The technical safety line for Bitcoin is currently around $104,000; if it can stabilize above this, it may surge to $116,000; if it drops to $98,000, it is likely to hold.
Some sectors are rising against the trend, such as TON social finance and RWA real asset tokenization concepts. Money flowing out of Bitcoin is running to speculate on them, indicating that the market always needs a place to stir. The ecosystems of Ethereum and Solana are still active (such as upgrades and new projects); in the long term, they remain hard currencies.
Short-term risks should not be taken lightly; the market is now like thin ice, with a fourfold difference in the thickness of buy and sell orders. A slight large action could lead to a 'flash crash'. Miner costs have risen to $40,000; if Bitcoin falls below $100,000, they may be forced to sell coins to recuperate losses, increasing selling pressure.
Long-term opportunities still exist. If the Federal Reserve lowers interest rates in September, Bitcoin could surge to $120,000. If the U.S. and China ease tariffs, market sentiment can also warm up. Countries like Russia and Turkey are using USDT for cross-border transactions to bypass the dollar, which will stabilize the demand for Bitcoin as 'digital gold.'
To summarize in one sentence.
The drop is due to rapid rises + scary policies + leverage explosions, but Bitcoin's 'backing' has not collapsed: institutions, countries, and deflation remain. Ordinary people should not panic or borrow money to speculate; instead, observe the movements of large funds, such as whether ETFs are buying, and wait for the next wave to come.