Bitcoin Drops 3% to $107,000 Amid Global Unease and Profit-Taking

Bitcoin experienced a notable pullback on Friday, slipping to $107,000 after reaching $110,500 the previous day. This placed it just 1.33% shy of its all-time high at $111,970. The reversal came despite continued inflows into Bitcoin exchange-traded funds, leaving many to speculate about the underlying causes of the drop.

One possible reason for the pullback is profit-taking by short-term traders. With Bitcoin trading just below its record level, the proximity to a key price zone could have encouraged some investors to lock in gains ahead of the weekend. This type of cautious move is not uncommon when prices approach major resistance levels.

However, the latest reversal in Bitcoin's price is not solely attributable to crypto market dynamics. It also reflects growing global unease and cooling market enthusiasm. Factors contributing to this sentiment include fears of a trade war due to Trump’s tariff deadline, which has left investors cautious about global market fallout. Additionally, exchange volume momentum has slowed since early June, with the monthly average at $5.9 billion—only 7% above the yearly average of $5.5 billion. On-chain activity has also stalled despite stable prices, pointing to hesitation and declining risk appetite among traders. Slower market action suggests that traders are playing it safe amid mixed signals from the broader economy.

Further stoking market unease was a report revealing activity from eight Bitcoin wallets that had remained untouched for 14 years. These long-dormant addresses transferred a combined total of over 80,000 BTC—equivalent to roughly $8.7 billion in value. The sudden movement of such a large sum sparked speculation across the market. Retail traders appeared uneasy, as large Bitcoin transfers often raise fears of sell-offs. This may have led some to sell their holdings to avoid potential losses. Despite the alarm, blockchain data pointed to a different motive. Julio Moreno, Head of Research at CryptoQuant, analyzed the transactions and noted that the movements appeared to be consolidations rather than preparations to sell.

Outside the crypto space, shifting economic conditions are also weighing on investor sentiment. Michael Hartnett, chief investment strategist at Bank of America, has signalled caution, noting that U.S. equity valuations remain elevated. With the S&P 500 hovering just below the 6,300 mark, he sees that level as a possible turning point where some investors may begin to scale back exposure. Hartnett warned that financial bubble risks are increasing, especially following the House’s approval of a $3.4 trillion fiscal plan that includes major tax cuts. He sees the added stimulus as something that could further stretch already overheated markets. That caution is now spilling into crypto, further explaining Bitcoin’s recent drop and its difficulty staying above the $111,000 mark.

Despite near-term weakness, some analysts maintain a positive outlook. Crypto market commentator Crypto Seth noted that Bitcoin could be poised to set a new all-time high within weeks. He pointed to strong inflows into U.S.-based Bitcoin ETFs, which attracted around $1 billion over the last two days, indicating sustained institutional interest. Elsewhere, analyst Ash Crypto stated that historically, Bitcoin tends to peak roughly. If the pattern continues, the next major top could arrive in September.