Bitcoin sinks to $115,000 after hitting its newest record, as macro concerns spark liquidation wave

The cryptocurrency market faced a significant downturn as the week began, with macroeconomic anxieties leading to forced liquidations exceeding $500 million for long positions. Bitcoin saw a 2% decline, settling at $115,255.70 after reaching a record high of $124,496 just last week. At its lowest point, the digital currency dipped to $114,706. Ether also experienced a downturn, dropping 4% to $4,283.15 after nearly hitting its all-time high of approximately $4,800 the previous week. The declines in both cryptocurrencies followed the release of July's wholesale inflation data, which was higher than anticipated, raising doubts about a possible interest rate cut by the Federal Reserve in September. This led to profit-taking among investors and a cascade of liquidations across the crypto landscape. In just 24 hours, forced sales from 131,455 traders amounted to $552.58 million, as reported by Coin Metrics. This total included around $123 million in bitcoin liquidations and $178 million in ether liquidations, where traders were compelled to sell their assets at market prices to address their debts, thereby driving prices lower. Further affecting market sentiment were remarks from Treasury Secretary Scott Bessent, who indicated that the strategic bitcoin reserve established by President Donald Trump in March would be limited to bitcoins forfeited to the federal government, as it seeks "budget-neutral pathways to acquire more bitcoin." The downturn also impacted other leading cryptocurrencies, with the CoinDesk 20 index, which tracks the broader crypto market, falling by 3.7%. Pre-market trading showed pressure on crypto-related stocks, particularly those associated with ether. Bitmine Immersion experienced a 6% decline, while SharpLink Gaming saw a 3% drop. Bullish, which recently debuted on public trading, also faced a 3% decrease. As the week unfolds, investors are closely monitoring the Federal Reserve's annual economic symposium in Jackson Hole, Wyoming, for insights into upcoming policy decisions. Additionally, crypto traders are awaiting Thursday's jobless claims data. Last week's surge in bitcoin and ether caught many by surprise, as traders had anticipated a pullback in August due to macro concerns overshadowing the recent positive momentum in cryptocurrency adoption by institutions and corporations. Despite the current pullbacks, many analysts view them as a healthy recalibration rather than a reaction to a crisis. This perspective is supported by the backing of cryptocurrency ETFs and companies aggressively accumulating bitcoin and ether. While ETFs tracking bitcoin and ether experienced net outflows on Friday, they recorded net inflows of $547 million and $2.9 billion, respectively, for the week, marking a record week of inflows for ETH funds and their 14th consecutive week of growth.