When Bitcoin plummeted from its historical high of $124,000 to below $115,000, the 7% decline was not a coincidental technical correction, but an inevitable result of multiple macro pressures resonating together. The U.S. Producer Price Index exceeded expectations, inflation concerns heated up again, directly leading to a sharp reduction in market expectations for a 50 basis point rate cut by the Federal Reserve in September to just 25 basis points; combined with the failure of the Alaska summit between Trump and Putin to reach substantial consensus on the Ukraine issue, geopolitical uncertainty further amplified risk aversion, and under this double impact, Bitcoin was the first to bear the pressure.
From a technical perspective, Bitcoin has formed a typical 'double top' pattern, which is a strong bearish signal from the market. However, it is worth noting that the trading volume did not significantly increase during the decline, indicating that major funds have not fled on a large scale. The current market trend leans more towards organized consolidation rather than a trend collapse. Among these, the $110,000 level is particularly critical—this is not only the starting point of multiple rebounds in history but also the core entry price for many institutions. If it can be held, it will provide important support for subsequent trends.
On-chain data reveals a completely opposite 'optimistic signal': over the past week, the number of large Bitcoin addresses increased instead of decreasing, with a cumulative increase of about 50, indicating that institutional investors are quietly increasing their holdings during this pullback; the proportion of long-term holders has risen to a historical high of 78%, and this phenomenon of 'diamond hands' often highly coincides with market bottom regions. More importantly, the Bitcoin ETF market is showing a 'price drop with increased volume' trend, with a total net inflow of $850 million over the past week, and the BlackRock IBIT fund alone saw over $300 million in inflows in one week. This performance of funds entering against the trend has often become a precursor to reversals in historical markets.
Looking at global monetary policy, despite the weakening expectations for a rate cut by the Federal Reserve, the European Central Bank, the Bank of Japan, and several central banks in emerging markets are still advancing easing policies, providing a loose macro environment for alternative assets like Bitcoin. Especially in the context of rising inflation expectations, Bitcoin's 'digital gold' safe-haven attribute is expected to be further strengthened, becoming an important choice against inflation.
Currently, the cryptocurrency fear and greed index has fallen to below 20, entering the 'extreme fear' range—historical data confirms that when this index enters this range, the probability of Bitcoin rising in the following month exceeds 80%. Extreme emotions often indicate that a bottom is near. In the short term, macroeconomic uncertainty may still suppress prices, but from a medium to long-term perspective, Bitcoin's fundamentals remain unshaken: the adoption rate by institutions continues to rise, technological innovation is steadily advancing, and the regulatory environment is gradually improving. These factors will all become the core drivers of its value growth.
During the market reshuffling period, panic is never the optimal solution. Only by understanding the trends behind the data can one seize the real opportunities amidst volatility.#BTC $BTC
