Crypto Market Falters as Bitcoin Tumbles Below $110,000, Erasing Trump-Era Gains

Market Recovery Stalls as Bitcoin Retreats to Seven-Week Low

In a significant reversal that has rattled cryptocurrency investors, bitcoin’s promising weekend recovery faltered dramatically on Monday, with the leading digital asset tumbling below the critical $110,000 threshold. The flagship cryptocurrency is now barely maintaining levels above where it traded during the euphoric rally following President Trump’s January 20 inauguration, when it reached $109,400. This sudden downturn has evaporated billions in market capitalization and has sparked renewed concerns about the sustainability of crypto’s recent bull run.

The world’s largest cryptocurrency made a brief attempt to stabilize around the $113,000 mark during U.S. trading hours, but sellers quickly overwhelmed buyers, sending prices into a precipitous decline toward a seven-week low, according to comprehensive data from CoinDesk’s market analytics. By late Monday, bitcoin was changing hands at approximately $109,700, representing a 2.7% decline over the preceding 24 hours. More concerningly, the asset has shed roughly 7% of its value since reaching heights above $117,000 following Federal Reserve Chair Jerome Powell’s notably dovish speech at the Jackson Hole economic symposium on Friday—a speech that initially triggered a market rally on hopes of forthcoming interest rate cuts.

Altcoin Market Capitulates as Selling Pressure Intensifies

The contagion of negative sentiment has spread beyond bitcoin, engulfing the broader cryptocurrency ecosystem in what appears to be a market-wide capitulation. While alternative cryptocurrencies, colloquially known as “altcoins,” demonstrated remarkable resilience during Sunday’s initial market turbulence, they ultimately succumbed to overwhelming selling pressure on Monday. Ethereum’s native token, ether (ETH), widely regarded as the second most significant digital asset, plummeted nearly 8% within a 24-hour period, dropping below the psychologically significant $4,400 level that had previously served as support.

Other prominent digital assets fared no better in this deteriorating market environment. Solana’s SOL token, which had been among the market’s strongest performers in recent months, suffered substantial losses alongside popular meme-inspired cryptocurrency dogecoin (DOGE). Similarly, Cardano (ADA) and Chainlink (LINK)—projects with substantial development activity and institutional backing—experienced punishing declines ranging between 6% and 8%. This synchronized downturn across diverse blockchain projects suggests a fundamental shift in market sentiment rather than isolated weakness in any particular cryptocurrency segment.

Leverage Wipeout Intensifies Market Volatility

Monday’s dramatic price action triggered a cascade of forced liquidations across cryptocurrency derivatives exchanges, compounding market volatility and accelerating price declines. According to data compiled by market intelligence platform CoinGlass, nearly $700 million in leveraged trading positions were forcibly closed during this market rout—a figure that exceeds even Sunday’s substantial liquidation events. The overwhelming majority of these liquidations—approximately $627 million—were long positions, indicating that traders who had borrowed funds to bet on price increases were caught off-guard by the sudden reversal.

This massive deleveraging event underscores the persistent high-risk nature of cryptocurrency markets, where excessive leverage continues to amplify price movements in both directions. The scale of today’s liquidations suggests many traders maintained aggressive bullish positioning despite warning signs of market exhaustion following bitcoin’s rapid ascent above $117,000. Market analysts point to this leverage purge as a potentially healthy market reset, eliminating speculative excess that had accumulated during the recent uptrend, though the immediate impact has been undeniably painful for affected traders.

Seasonal Patterns Add to Investor Concerns

As if the technical damage weren’t concerning enough for cryptocurrency investors, historical seasonal patterns are aligning against the prospect of an immediate market recovery. As August draws to a close, traders are increasingly mindful that September has consistently ranked as the weakest month for cryptocurrency performance. According to comprehensive historical data compiled by CoinGlass, bitcoin has averaged a 3.77% decline during September over its trading history, while Ethereum has fared even worse with average monthly losses of 6.42%.

This well-documented seasonal weakness could potentially exacerbate current negative market sentiment, particularly among algorithmic trading systems and institutional investors who incorporate seasonal factors into their decision-making frameworks. Market analysts suggest multiple factors may contribute to this recurring September slump, including tax-related selling pressure, decreased trading volumes as summer concludes, and the historical coincidence of major market-moving announcements during this period. With this seasonal headwind now approaching, some traders are adjusting their strategies to accommodate potentially extended consolidation or further declines before any sustainable recovery materializes.

Market Outlook Remains Uncertain Amid Macroeconomic Pressures

The cryptocurrency market’s abrupt reversal comes amid broader uncertainty in global financial markets, with investors recalibrating expectations regarding monetary policy, inflation trajectories, and economic growth prospects. While Federal Reserve Chair Powell’s Jackson Hole address initially sparked optimism about the potential for interest rate reductions, subsequent analysis of his comments has yielded more nuanced interpretations about the timeline and magnitude of any policy adjustments. This reassessment appears to have dampened enthusiasm for risk assets broadly, with cryptocurrencies experiencing particularly pronounced volatility.

Looking ahead, market participants remain divided on the short-term trajectory for bitcoin and the broader digital asset ecosystem. Technical analysts highlight the importance of bitcoin maintaining support above the psychologically significant $100,000 level, while on-chain metrics show mixed signals regarding investor behavior and market structure. Some point to continued institutional adoption and favorable regulatory developments as potential catalysts for renewed upside, while others caution that macroeconomic headwinds and excessive leverage in the system could trigger further consolidation or declines. What remains clear is that after months of relatively steady appreciation, cryptocurrency markets have entered a period of heightened uncertainty and volatility that will test the conviction of both recent entrants and longtime participants in this emerging asset class.