FameEX Hot Topics | Why is Bitcoin Falling and Will $112K Be the Bottom?

Bitcoin's recent drop below $113,000 highlights concerns surrounding the US economy, stock markets, and the cryptocurrency space. Despite the short-term volatility, many analysts believe the downturn will not end Bitcoin's long-term bullish trend. The price decline came as a surprise to traders, especially after Bitcoin hit an all-time high of $124,176 earlier in the week. This triggered the liquidation of $113 million in leveraged long positions, raising concerns about whether the bull market is over.

The acceleration of Bitcoin’s price correction came on the heels of reports that the US Securities and Exchange Commission (SEC) is investigating potential fraud and stock manipulation at Alt5 Sigma. This company recently partnered with US President Donald Trump’s World Liberty Financial in a $1.5 billion deal, adding to investor anxiety. The growing uncertainty in the macroeconomic environment also weighed heavily on the cryptocurrency market.

In addition to the SEC investigation, cryptocurrency investors reacted to broader economic news. The Nasdaq 100 dropped by 1.5% following research from MIT NANDA, which revealed that 95% of companies failed to generate rapid revenue growth from artificial intelligence (AI) pilot programs. This sparked further risk aversion among investors. Additionally, the US government’s decision to impose new 50% import duties on aluminum- and steel-containing products led to concerns about supply chain disruptions and higher consumer prices, further impacting market sentiment.

Meanwhile, UBS investment bank raised its gold price forecast to $3,700 by September 2026, citing factors like below-trend economic growth, Federal Reserve policy easing, and a weaker dollar. The bank’s revised outlook reflects investor concerns over the US fiscal deficit and questions about the independence of the Federal Reserve, further contributing to the risk-off sentiment in the market.

However, historical trends suggest that Bitcoin’s long-term bull run is not over. A similar fear-driven correction occurred in April 2023, when Bitcoin briefly dropped below $74,500 before recovering with a 40% rally in just a month. There is no concrete evidence to suggest that Bitcoin’s bull market has ended, and current turbulence may even present an opportunity for further growth as market sentiment stabilizes.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.