Bitcoin price drops, over 110,000 liquidations: Market data on August 18 shows that Bitcoin fell to $114,929.2, down 2.59%. Ethereum also dropped 3.33%, trading at $4,329. The cryptocurrency market saw over 110,000 liquidations, with a total liquidation amount reaching $475 million.
Traders buy put options, betting on a significant drop in Bitcoin price: Deribit data shows that traders have purchased put options expiring on September 26 with a strike price of $95,000, which may indicate that Bitcoin will sharply retreat from the historical high of $124,514.62 reached on August 14. Meanwhile, approximately $367 million in long positions were liquidated in the past 24 hours.
Analysis
U.S. macroeconomic data and government statements affect investor confidence: Vincent Liu, Chief Investment Officer of Kronos Research, stated that the recent drop in Bitcoin reflects a cautious investor sentiment against the backdrop of U.S. inflation exceeding expectations. High inflation diminishes hopes for a rate cut by the Federal Reserve, strengthens the dollar, and fosters risk-averse behavior. Additionally, U.S. Treasury Secretary Yellen stated that the government will not purchase Bitcoin for its strategic reserves but will explore a more "budget-neutral" way to expand reserves, further undermining investor confidence.
Institutional fund flows indicate that the market decline is due to capital rotation: Rachael Lucas, a cryptocurrency analyst at BTCMarkets, stated that the fund flow data from spot ETFs indicates that this market decline is more a result of capital rotation rather than a collapse of investor confidence. Last Friday, funds flowed out of Bitcoin ETFs from Grayscale and ARK Invest, while BlackRock's IBIT continued to attract net inflows.
Veterans have differing views on Bitcoin's future trend: Steven McClurg, CEO of cryptocurrency asset management firm Canary Capital, believes that Bitcoin may rise to $150,000 during this bullish cycle, after which it will enter a downward phase due to his pessimism about the macroeconomic outlook. In contrast, Matt Hougan, Chief Investment Officer of Bitwise, believes that the cryptocurrency bull market will not slow down anytime soon, asserting that 2026 will be a year of continued growth, and this upward trend will last for several years.
