Bitcoin Crash News Alert: Why the Bloodbath May Not Be Over Yet

The cryptocurrency market is once again in turmoil as Bitcoin, the world’s largest digital asset, has faced a steep downturn. After briefly testing highs near $120,000 earlier this month, the flagship token has now slipped to around $108,600, marking a 1.9% decline over the past 24 hours, according to data from CoinMarketCap.

Over the last week, Bitcoin has shed nearly 6% of its value. On a monthly basis, the losses now approach 9%, leaving traders and long-term investors worried about whether this downturn is simply a temporary correction or the beginning of a deeper pullback. Many are calling it a “Bitcoin bloodbath,” a term that reflects both the speed of the drop and the fear gripping the market.

Traders Brace for More Pain

Crypto analyst Ali Martinez has issued a stark warning, pointing out that historically, true rebounds often emerge only when traders have endured severe losses. According to his analysis, past cycles showed that recoveries typically started when realized losses among traders hovered around –12%. At present, losses stand at just –0.60%, far from the pain threshold that has historically signaled capitulation.

Source: X

This data suggests that the worst may not yet be over. Instead, Martinez argues that deeper losses could be required before Bitcoin finds solid ground for a sustainable rally.

Why Is Bitcoin Falling?

Several factors are combining to put pressure on Bitcoin prices. Analysts highlight three primary reasons behind the sudden slump:

1. Profit-Taking at Key Levels
   After testing levels above $120,000, large institutional players and whales began locking in profits. The selling pressure at those highs sparked a chain reaction, leading to further declines.

2. ETF Inflows Slow Down
   In July and early August, spot Bitcoin ETFs saw strong inflows, adding momentum to the rally. However, inflows have since cooled, reducing the demand that had previously pushed prices higher.

3. Macro-Economic Headwinds
   A strengthening U.S. dollar and renewed uncertainty around Federal Reserve interest rate policy have added to the selling pressure. With global markets already jittery, Bitcoin has not been immune to broader macroeconomic forces.

Technical Analysis: Trouble Ahead

From a technical perspective, the charts paint a cautious picture. As of Friday morning, Bitcoin was trading around $108,483, a significant drop from its recent peak above $120,000. The move represents a correction of nearly 10%.

Key technical indicators suggest the market remains in a vulnerable state:

• Relative Strength Index (RSI): Currently at 49, indicating a neutral stance. The market is neither oversold nor overbought, which means further volatility is possible.

• MACD: Slightly bearish but beginning to flatten, hinting that selling momentum may be losing steam.

• Support Levels: $107,000 is seen as the next crucial support. A breakdown below this level could send Bitcoin lower, potentially toward the $104,000–$105,000 zone.

• Resistance Zones: Any recovery attempt will likely face resistance around $110,000–$112,000. Sustained gains above this zone could provide the first sign of stability.

Short-Term vs. Long-Term Outlook

While the short-term charts remain bearish, analysts argue that the longer-term structure for Bitcoin is still bullish. The crypto market has weathered similar downturns in the past, often before staging impressive comebacks.

• Short Term (1–7 days): Prices may consolidate between $107,000 and $110,000, reflecting uncertainty and lack of strong momentum.

• Mid Term (1–4 weeks): Should the $107,000 level hold and ETF inflows resume, Bitcoin could rebound toward $115,000–$118,000.

• Long Term (2–6 months): If broader technical and macro conditions align, Bitcoin could make another attempt at the $120,000 mark. However, caution remains the prevailing sentiment.

September Effect: A Historic Weakness

Adding to investor anxiety is the historical pattern of weak September performances for Bitcoin. Market analyst known as Cyclop pointed out that from 2013 to 2025, the average return for Bitcoin in September has been –4.35%.

While a few years such as 2015, 2016, 2021, and 2023 saw gains, most Septembers have ended in losses. Traders often call this recurring downturn the “September Effect.” Contributing factors may include seasonal liquidity drops, profit-taking after summer rallies, and broader market slowdowns.

Source: Coinglass

The historical data raises concerns that this September could continue the negative trend. However, many traders remain hopeful that October, often dubbed “Uptober,” could provide relief. Historically, October has been one of Bitcoin’s stronger months, with positive momentum returning after September’s weakness.

A Golden Opportunity or a Dangerous Trap?

For long-term believers in Bitcoin, corrections are often seen as opportunities to accumulate more at discounted prices. History has shown that Bitcoin’s growth trajectory remains intact despite repeated downturns. Those who bought during periods of panic often saw significant gains when the market eventually recovered.

But experts caution that the current market may still have more downside before the next rally begins. With support levels at risk and traders yet to experience the kind of deep losses that typically precede a turnaround, the near-term outlook remains uncertain.

Market Sentiment and Broader Implications

Sentiment across the crypto market has turned fearful, with smaller tokens also seeing steep declines. Ethereum, Solana, and other major altcoins have mirrored Bitcoin’s fall, amplifying the sense of a market-wide downturn.

Yet some analysts argue that such widespread weakness often lays the foundation for the next bull run. If Bitcoin manages to hold above critical support levels while macroeconomic conditions stabilize, confidence could return quickly.

The question now is whether traders can withstand more turbulence before that rebound arrives. For newcomers, this period serves as a stark reminder of crypto’s inherent volatility. For seasoned investors, it is another test of patience in a market that has seen countless cycles of fear and greed.

Looking Ahead

As the calendar moves deeper into September, all eyes will be on Bitcoin’s ability to defend its support levels. If prices stabilize near $107,000 and ETF inflows pick up again, optimism could return by October. But if the downward pressure continues, a retest of $104,000 remains on the table.

For now, the so-called “Bitcoin bloodbath” remains a painful reality. Whether it turns into a historic buying opportunity or a more prolonged downturn will depend on both technical factors and external economic conditions in the weeks ahead.

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