Bitcoin (BTC-USD) extended its losses on Monday following last week’s record-breaking rally, as investors booked profits from the recent surge. The world’s largest cryptocurrency fell about 2%, hovering just above $115,000 in early trading after reaching a high of $123,500 last Thursday.
Year-to-date, bitcoin has gained 23%, a move fueled by expectations of Federal Reserve rate cuts and heavy purchases from corporate treasuries. Ether (ETH-USD), the second-largest cryptocurrency by market capitalization, also slipped 3% to around $4,350 per token after climbing last week to its highest level of the year, approaching a record high near $4,900.
“The sharp pullback in cryptocurrencies comes as the market is getting deleveraged following the peaks recorded last week,” said Samer Hasn, senior market analyst at foreign exchange platform XS.com. He noted that more than $1.7 billion in long crypto futures positions have been liquidated since last Thursday, according to CoinGlass data, signaling an erosion of bullish momentum.
The sell-off comes as the broader equity market rally pauses, with the S&P 500 (^GSPC) hovering near record levels. Late last week, bitcoin and other digital assets retreated after hopes for a 0.5% Fed rate cut in September waned following a hotter-than-expected wholesale inflation report.
Investors will look for further guidance when Fed Chair Jerome Powell speaks at the Jackson Hole Economic Symposium this Friday. “If Powell maintains a ‘wait-and-see’ approach, BTC will likely struggle to break higher in the near term, instead consolidating within the $115,000–$120,000 range,” said Dean Chen, analyst at crypto derivatives exchange Bitunix. “A breakdown could expose $112,000, while holding above could allow another test of the $118,000–$120,000 resistance band.”
Crypto-related stocks also felt the pressure at the open, with Strategy (MSTR), Robinhood (HOOD), and Coinbase (COIN) slipping, though they recovered part of their losses during the first hour of trading.
MicroStrategy Inc., operating under the name “Strategy”, announced on Monday the acquisition of an additional 430 Bitcoin, purchased at an average price of approximately $119,666 each, Azernews reports, citing foreign media.
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