Bitcoin Drops Sharply Below $115K Amid Bearish Retail Sentiment and Market Volatility
August 20, 2025: Bitcoin (BTC), the world’s largest cryptocurrency, has experienced a significant price correction after reaching an all-time high, dropping below the $115,000 mark and signaling growing bearish sentiment among retail investors.
Following a peak of approximately $124,000 earlier this month, bitcoin’s value plunged nearly 5% over the past week, settling around $115,000 by Monday, August 18. This recent decline reflects a consolidation phase in a highly volatile market, with Ethereum (ETH) also showing weakness, trading near $4,300 after a 10% decrease from its high of around $4,800. The overall crypto market capitalization now stands at roughly $3.9 trillion.
Market Dynamics and Technical Analysis
According to recent technical studies, bitcoin is trading near $113,800 as of August 20, having dropped about 1.5% in the last week amid rising trade volumes, which reached $48 billion, a 34% increase compared to previous weeks. While the long- and mid-term technical indicators (SMA 200 and SMA 50) still point to a bullish trend, short-term momentum appears fatigued, demonstrated by a neutral SMA 20. This suggests possible stabilization or a continued pullback phase in the near term.
Crypto expert Vikram Subburaj, CEO of Giottus.com, noted that bitcoin is likely to test a key support level at $115,000 and may face downward pressure due to expected rallies in traditional safe-haven assets like gold and silver. He cautioned investors to be wary of the volatile environment, particularly after recent US Producer Price Index (PPI) data heightened macroeconomic concerns.
Factors Behind the Decline
Market observers highlight several contributing factors to bitcoin’s recent correction:
- Speculative Profit-Taking: After hitting new all-time highs, a portion of investors are cashing out profits, leading to temporary price dips.
- Upcoming Federal Reserve Events: Anticipation of a potentially hawkish speech by Federal Reserve Chair Jerome Powell at the Jackson Hole symposium has injected caution in markets, causing crypto assets to fall further.
- Regulatory Developments: While Japan’s Financial Services Agency is moving towards approving yen-denominated stablecoins, regulatory uncertainty, especially in the U.S., remains a volatility factor. For example, Gemini’s recent filing to list Class A common stock on Nasdaq indicates ongoing shifts in crypto market integration with traditional finance.
Long-Term Outlook
Despite the short-term turbulence, many analysts remain optimistic about bitcoin’s longer-term prospects. VanEck’s mid-August analysis highlighted that bitcoin reached an all-time high of $124,000 before a correction, maintaining a bullish outlook toward a $180,000 year-end target. Meanwhile, on-chain data shows that approximately 92% of bitcoin holdings are still in profit, suggesting strong foundational support.
Price forecasts for the coming months anticipate bitcoin fluctuating between $105,000 and $130,000, depending on market conditions, with potential rebounds if key support levels hold. However, investors are advised to approach the market cautiously and consider waiting for stabilization before deploying new capital into altcoins or riskier assets.
Conclusion
The recent selloff in bitcoin and other cryptocurrencies reflects a natural market correction amid macroeconomic uncertainties and profit-taking following a historic rally. With ongoing volatility expected, market participants should monitor key support levels and external economic indicators closely. Retail sentiment, currently bearish, could shift positively should bitcoin maintain critical price thresholds and benefit from clearer regulatory frameworks.