Bitcoin (BTC-USD) slid beneath the $112,000 mark on Thursday, extending this week’s volatile trading as risk appetite weakened across both crypto and equities. The benchmark token fell around 3% intraday, while ether (ETH-USD) and solana (SOL-USD) posted even steeper losses
The dips come against a backdrop of heavy liquidations earlier in the week, a cooling equity market, and rising questions about liquidity conditions as the US Treasury ramps up bond issuance. Together, the factors have created a risk-off mood that is weighing broadly on digital assets.
Wave of Liquidations Weighs on Crypto
Bitcoin’s latest downturn follows a cascade of forced liquidations that shook the market earlier in the week, when more than $1.6 billion in long positions were wiped out. According to CoinGlass data, another $500 million in crypto longs was liquidated in the past 24 hours alone, amplifying downward pressure. Analysts say the absence of new inflows to absorb this selling has left prices vulnerable to further sharp swings.
Ethereum, in particular, fell nearly 5% to below $4,000, its weakest level since August, before trimming some losses. Net outflows from newly launched Ethereum ETFs have added to the pressure, undercutting optimism that the products would fuel sustained institutional demand.
Macro Headwinds Add to Caution
The pullback in crypto mirrors weakness in broader financial markets, with US equities slipping from record highs amid concerns valuations have stretched too far on AI enthusiasm. Federal Reserve uncertainty continues to loom, as policymakers debate the pace of further rate cuts in the face of still-robust economic data. Higher-for-longer interest rates tend to sap momentum from risk-sensitive assets like cryptocurrencies.
At the same time, liquidity dynamics are emerging as another headwind. The Treasury General Account, essentially the government’s operating balance at the Fed, has been refilled in recent weeks via new T-bill and bond issuance. This shift diverts cash away from risk assets, including crypto, by offering investors a safer short-term alternative with attractive yields.
Pressure Spreads to Crypto-Linked Equities
The crypto sell-off has spilled into public companies tied to the sector. Shares of Coinbase (COIN) and Robinhood (HOOD) both slipped as trading volumes softened. Bitcoin-holding firm MicroStrategy (MSTR) and stablecoin issuer Circle also traded lower, reflecting the broader downturn in sentiment.
For listed companies, these declines underscore how closely tethered valuations remain to swings in token prices. With bitcoin and ether accounting for the lion’s share of trading activity, volatility in digital assets continues to directly impact exchanges, payment firms, and corporate treasuries exposed to crypto.
Looking Ahead
Seasonal patterns suggest volatility could persist through September, historically a choppy month for crypto markets. Still, bulls point to the final quarter of the year as a potential tailwind, with past cycles often delivering stronger momentum into year-end. Near-term, investors will be watching liquidity conditions, ETF flows, and the Fed’s rate outlook for signals on whether bitcoin can stabilize above the $110,000 threshold or face another wave of selling.