Bitcoin (BTC) has dipped below the critical $105,000 mark, recording a 2.68% drop within 24 hours. Trading at $104,989.50 per coin, the decline reflects growing market pressure amid shifting macroeconomic conditions and intensified investor caution. This movement marks a correction from its recent high of $111,891.30 on May 22, 2025—just over a week prior—representing a roughly 6% pullback from peak levels. With a current market cap of approximately $2.09 trillion, Bitcoin continues to dominate the crypto landscape, accounting for 65% of total market capitalization across digital assets.
Despite increased volatility, trading volume has surged to $578.8 billion over the past day—an increase of nearly 26% compared to the weekly average of $459.2 billion—indicating strong market participation and rising interest during periods of price adjustment.
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Key Market Drivers Behind the Downturn
Several interconnected factors have contributed to Bitcoin’s recent retreat from its all-time highs.
Macroeconomic Pressures Weigh on Risk Assets
Rising expectations of Federal Reserve rate hikes have pushed U.S. Treasury yields up to 4.5%, increasing the opportunity cost of holding non-yielding assets like cryptocurrencies. Higher interest rates typically strengthen the U.S. dollar and reduce appetite for speculative investments, including Bitcoin.
Additionally, global trade tensions—sparked by renewed tariff discussions—have heightened economic uncertainty, affecting both traditional markets and digital assets. As equities wavered under similar pressures, Bitcoin’s historically increasing correlation with stock indices became evident once again.
Liquidations Amplify Downward Momentum
Technical triggers further accelerated the sell-off. Over $260 million in long positions were liquidated within 24 hours across major exchanges, with Bitcoin accounting for 30% of total crypto liquidations. A key psychological and technical level at $106,600 was breached, prompting algorithmic trading systems and leveraged traders to exit positions.
X platform analyst @CryptoPainter_X noted: “Once $106,600 failed as support, the path lower opened up. Immediate focus now shifts to the $103,800–$104,600 zone as the next defense line.”
Technical Analysis: Short-Term Weakness, Long-Term Resilience
Bitcoin’s daily chart reveals a bearish pattern of lower highs, suggesting weakening bullish momentum. The 14-day Relative Strength Index (RSI) has pulled back to 58.7, retreating from overbought territory and signaling reduced upward pressure.
Key Levels to Watch:
- Support Zone: $103,800–$104,600
A decisive break below could open the door to testing the 200-day moving average near $98,000. - Resistance Level: $108,100
A reclaim above this level would signal renewed bullish intent and potentially pave the way toward retesting the $112,000 record high. - Breakout Target: $112,000
If macro conditions stabilize and institutional inflows resume, this former peak may become a new benchmark.
High-profile financial institutions remain cautiously optimistic. Sarah Chen, Goldman Sachs Global Markets Analyst, stated: “Bitcoin is increasingly moving in tandem with broader equity markets. While short-term headwinds persist, structural demand remains intact.”
Investment Opportunities in a Cooling Market
Even amid short-term turbulence, strategic opportunities are emerging for informed investors.
Regulatory Clarity Fuels Institutional Confidence
The passage of the GENIUS Act by the U.S. Senate in May 2025 introduced a clear regulatory framework for dollar-backed stablecoins—a move widely seen as a milestone for mainstream adoption. This development has bolstered confidence among institutional players and laid the groundwork for expanded crypto integration into traditional finance.
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Public Companies Riding the Crypto Wave
Several publicly traded firms are benefiting directly from crypto market dynamics:
- Coinbase (COIN.US): With rising trading volumes, Coinbase shares are up 18% year-to-date in 2025.
- MicroStrategy (MSTR.US): Holding over $30 billion in Bitcoin, its stock has gained 25% this year, reinforcing its status as a proxy for BTC exposure.
- Grayscale Bitcoin Trust (GBTC.US): Despite fee competition from newer ETFs, GBTC remains a major vehicle for institutional access to Bitcoin.
- LianLian Digital (02598.HK): Gained traction after joining Hong Kong’s stablecoin sandbox initiative, with shares rising 45% in 2025 due to growing blockchain payment adoption.
UBS analyst John Tang emphasized: “This pullback presents a compelling entry point. Regulatory clarity and steady institutional accumulation suggest Bitcoin is well-positioned to reclaim $110,000 by year-end.”
Editor’s Summary: Navigating Volatility with Strategy
Bitcoin’s drop below $105,000 underscores the influence of macroeconomic forces—particularly interest rate outlooks and geopolitical trade policies—on digital asset valuations. While technical indicators point to short-term bearish sentiment, the fundamental pillars supporting Bitcoin’s long-term growth remain strong.
Regulatory progress, growing ETF adoption, and sustained corporate treasury allocations continue to underpin market resilience. Investors should monitor the $103,800–$104,600 support band closely; a successful hold could set the stage for a rebound rally.
Equally important is diversifying exposure through crypto-adjacent equities and regulated investment vehicles while managing risk amid ongoing volatility.
Frequently Asked Questions (FAQ)
Q: Why did Bitcoin drop below $105,000?
A: The decline was driven by a combination of rising U.S. Treasury yields due to Fed rate hike expectations, global trade uncertainties, and technical breakdowns that triggered leveraged position liquidations.
Q: Is this a long-term bear market or just a correction?
A: Most analysts view this as a healthy correction rather than the start of a prolonged bear cycle. Fundamental drivers like institutional adoption and regulatory advancements remain positive.
Q: What is the next key support level for Bitcoin?
A: Immediate support lies between $103,800 and $104,600. A break below could lead to a test of the 200-day moving average near $98,000.
Q: How does the GENIUS Act impact Bitcoin?
A: By establishing a legal framework for stablecoins, the act enhances financial infrastructure trust and encourages more institutional capital to enter the ecosystem—indirectly benefiting Bitcoin.
Q: Should I buy Bitcoin now or wait?
A: Market timing is challenging. Dollar-cost averaging into positions may be prudent given ongoing volatility. Many experts see current levels as favorable for long-term accumulation.
Q: Which stocks offer indirect exposure to Bitcoin?
A: Consider Coinbase (COIN), MicroStrategy (MSTR), Grayscale Bitcoin Trust (GBTC), and blockchain-focused fintechs like LianLian Digital (02598.HK).
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