Bitcoin, Ethereum, and Dogecoin Lowered in Value Today: Reason Unveiled
In August 2025, the price of Bitcoin and other cryptocurrencies has experienced a dip, driven by a combination of factors.
Profit-taking by large holders, known as whales, and increased selling pressure from the futures market have contributed to this downward trend. A significant movement of around 3,000 BTC by large holders in early August, a sign often associated with market tops, has added to the price pressure [5]. Furthermore, there has been a spike in taker sell volume on Bitcoin futures contracts, further intensifying the selling pressure [5].
Additionally, spot Bitcoin ETFs have seen massive withdrawals, amounting to approximately $1.2 billion within a few days. This reduction in institutional demand has led to increased selling [5]. Some experts view the current market action as a "trap," with Bitcoin showing signs of structural weakness since July [4]. Ethereum, on the other hand, is currently outperforming Bitcoin in both price and narrative, adding competitive pressure [4].
Despite these recent declines, Bitcoin remains above its 200-day EMA, maintaining a long-term uptrend. However, short-term bearish views anticipate possible dips toward $101K–$111K before renewed bullish demand could potentially push prices higher again [1][2][4].
Macroeconomic factors also play a role in the cryptocurrency market. While no direct recent Federal Reserve policy actions were detailed, general macroeconomic uncertainty and volatility relate to broader interest rate decision anticipation, which affects market risk appetite and crypto price movements [4][5]. Historically, Federal Reserve interest rate decisions impact crypto via influencing liquidity and investor willingness to take risk, with tightening often dampening crypto prices and easing supporting rallies [4].
The Fed has raised its benchmark overnight lending rate from practically zero to inside a range of 1.5% to 1.75% after its latest 75-basis-point (0.75%) rate hike last week [6]. The Fed's balance sheet reduction efforts, which include running off bond holdings, could potentially hurt Bitcoin further [7].
Citigroup has raised its expected likelihood of a recession to 50% [8]. Cryptocurrencies have not fared well due to the Fed's hawkish stance this year to tackle inflation [9]. The global economy is being affected by severe supply shocks, pushing up inflation and driving down growth [10].
The price drop of Bitcoin over the past weekend might have been due to the largest Bitcoin spot ETF losing half of its assets under management [11]. Ethereum (ETH) and Dogecoin (DOGE) have also seen significant declines [12].
Despite the current bearish sentiment, some analysts remain optimistic. Ian Harnett, the chief investment officer of Absolute Strategy Research, predicts that Bitcoin and Ethereum are here to stay and will be good long-term buys at current levels [13]. However, Harnett predicts that the price of Bitcoin could drop to as low as $13,000 [14].
In summary, the current price action of Bitcoin is influenced by profit-taking by large holders, futures market selling pressure, ETF outflows, structural market shifts favoring Ethereum, and cautious investor sentiment pending macroeconomic and Federal Reserve interest rate clarity [1][4][5]. The Fed's rate hikes and balance sheet reduction efforts, coupled with global economic uncertainty, have put downward pressure on the crypto market.
- Investors might find it prudent to consider the recent decline in Bitcoin's price, attributed to various factors such as profit-taking, futures market selling pressure, ETF outflows, and the overall cautious sentiment in the market, before re-investing in the crypto market.
- The technology sector, including Bitcoin and other cryptocurrencies, may experience further financial impact as the Federal Reserve continues its interest rate hikes and balance sheet reduction efforts, which have been contributing to the downward trend observed in the crypto market.
- In spite of the bearish market conditions, certain analysts express optimism about the long-term potential of Bitcoin and Ethereum, suggesting that these digital assets might present favorable investment opportunities at their current prices, although a potential prices drop to $13,000 for Bitcoin could be expected.
