Bitcoin’s price fell by 0.8% to $113,467 early Wednesday, hovering near a one-month low reached earlier this week. The drop can be attributed to U.S. trade tariff threats and concerns about slowing global growth, which have dampened investor confidence and prompted a shift away from riskier assets like cryptocurrencies.
This decline follows a period of profit-taking after a strong rally in July. While altcoins briefly saw a surge earlier this week, the momentum quickly faded, dragging down the broader market including Bitcoin.
Profit-Taking from Long-Term Holders
According to CryptoQuant analyst Maartunn, the recent downturn in Bitcoin is largely driven by selling from long-term holders (LTHs), including a notable sale of 80,000 BTC from a Satoshi-era wallet. However, Maartunn emphasizes that it’s not just one whale causing this shift but a wave of long-term investors cashing out after the all-time high breakout.
Retail and Institutional Activity
Retail investors have flocked to the market following Bitcoin’s record high, a common trend during bullish periods. Institutional interest has also been evident, with firms like Strategy and Metaplanet increasing their exposure to Bitcoin. Despite this combined buying power, prices failed to sustain above $120K, leading to renewed selling pressure.
Short-Term Holders Under Water
The most significant impact has been felt from short-term holders (STHs) capitulating at a loss. On-chain data shows significant realized losses in July, with a notable sell-off of 70,028 BTC after July 31. Maartunn highlights this instance for its size and duration, indicating a notable weakening of short-term sentiment.
ETF Outflows Add to the Pressure
Bitcoin ETFs have experienced outflows in recent sessions, although Maartunn considers these to be modest compared to past corrections. However, when combined with LTH profit-taking and STH capitulation, they contribute to a market struggling to find fresh upward momentum.
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