Bitcoin Slips Again: 3 Key Reasons Behind the Crypto Downturn

The crypto market is reeling, down 1.06% in the past 24 hours, echoing a cautious sentiment in global financial markets. 

Crypto Market Slides Again — Bitcoin Down 0.64%

Bitcoin — the largest cryptocurrency — fell 0.64% over the same period, trading near $121,186 at the time of writing. This drop pulled other major altcoins lower:

• Ethereum: –2.31% 

• XRP: –0.95% 

• Solana: –2.92% 

• Cardano: –0.98%

Let’s dig into the three major forces driving this decline — and what might lie ahead.

1. Inflation Jitters Shake Rate Cut Expectations

A key drag on markets right now is the renewed concern over inflation in the U.S. The New York Fed’s recent survey revealed that one-year inflation expectations have climbed to 3.4%, up from 3.2% last month — the highest in 3.5 years. 

This complicates the Federal Reserve’s plan for future rate cuts. If inflation remains “sticky,” the Fed may hold rates higher for longer — strengthening the dollar and putting pressure on risk assets like Bitcoin and Ethereum.

In simpler terms: investors are beginning to accept the possibility that rate cuts may be delayed, and Bitcoin is suffering as a result.

2. Technical Weakness & Liquidations Accelerate Downtrend

From a technical lens, Bitcoin has encountered resistance near $124,000 — a zone where many traders historically lock in profits. This resistance has quelled buying momentum and cooled price action. 

When Bitcoin dipped below $122,000, it triggered a cascade of liquidations — over $688 million in leveraged long positions were wiped within a single day. 

Such forced liquidations often ripple across the crypto market, pulling down altcoins and exacerbating bearish pressure.

3. Risk-Off Sentiment & ETF Outflows

A broader risk-off mood is gripping financial markets, with institutional investors reportedly trimming their crypto exposure. ETF outflows suggest that major players are either locking in profits or choosing to wait on the sidelines. 

Compounding the issue, volatility in BNB-linked meme coins and rising concerns about wash trading in crypto derivatives have rattled market confidence. 

As sentiment sours, many short-term traders are taking defensive positions, while longer-term investors are waiting for clearer directional signals.

What’s Next for Bitcoin?

Despite recent weakness, many analysts believe Bitcoin’s long-term structural outlook remains intact. Prices are now testing the support zone near $120,000. If this level holds, a rebound toward $144,000 could be viable over the coming months.

That said, volatility may persist in the short term as markets absorb fresh inflation data, central bank signals, and on-chain flows.

In sum, this doesn’t look like a crash — more a healthy consolidation before the next big move.

Conclusion

Bitcoin’s 0.64% decline amid a broader 1.06% slide in the crypto market underscores renewed pressure from inflation fears, technical liquidations, and ETF outflows. Each of these factors is interacting in a way that magnifies downside risk.

Still, the presence of strong support near $120,000 and persistent demand from longer-term holders suggests this may be more of a pause than a breakdown. For now, market participants will be watching macro signals and on-chain data closely.

As always in crypto: volatility is the norm, and timing market pivots requires both technical insight and patience.