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Bitcoin, Ethereum, and XRP experienced significant price declines on October 8, 2025, as profit-taking and risk-off sentiment dominated the cryptocurrency market. Bitcoin dropped to $121,500, retreating from a record high of $126,000 earlier in the week, while Ethereum fell 5.7% to $4,477 and XRP declined 3.8% to $2.87 Invezz^[1]. The total crypto market capitalization dipped to $4.15 trillion, reflecting heightened volatility amid macroeconomic uncertainties. Liquidations of long positions exacerbated the sell-off, with $170 million in Ethereum and $160 million in Bitcoin positions closed in a 24-hour period Invezz^[1].

The pullback followed a surge in ETF inflows, which had driven Bitcoin's rally. U.S. spot Bitcoin ETFs recorded $1.2 billion in net inflows on October 6, the largest single-day inflow of 2025, while cumulative inflows neared $63 billion . Despite this institutional demand, profit-taking emerged as a key driver of the correction. Analysts noted that Bitcoin's decline to $120,000 marked a retracement after a rapid ascent to $126,000, a pattern common in post-rally markets Invezz^[1]. Ethereum and XRP also faced pressure, with XRP testing critical support levels near $2.70 and Ethereum approaching its 50-day exponential moving average (EMA) at $4,292 FXStreet^[5].

Macroeconomic factors further compounded the downturn. Concerns over a potential AI industry bubble, triggered by reports of Oracle's struggles to monetize its AI initiatives and massive deals between OpenAI and chipmakers like Nvidia and AMD, spooked investors Invezz^[1]. Meanwhile, the likelihood of a prolonged U.S. government shutdown increased to 75%, pushing investors toward Bitcoin as a "safe haven" but delaying approvals for altcoin ETFs like XRP Invezz^[1]. The U.S. dollar index strengthened, adding pressure to risk assets, while markets awaited the Federal Reserve's policy meeting minutes for clarity on interest rate cuts Investing.com^[3].

Technical analysis highlighted key levels for potential rebounds. Bitcoin's price action showed a descending triangle pattern, with a breakout above $120,500 seen as critical for resuming the uptrend Cointelegraph^[4]. Ethereum bulls eyed a rebound off the 50-day EMA at $4,292, while XRP faced bearish momentum as it fell below the 100-day EMA at $2.85 FXStreet^[5]. Analysts noted that sustained volume and buying pressure would be necessary to validate a bullish breakout, with the 200-day EMA at $107,760 serving as a psychological floor for Bitcoin FXStreet^[5].

The market's correction also coincided with record institutional interest. BlackRock's iShares Bitcoin Trust (IBIT) led inflows with $969.95 million on October 6, pushing its net assets to $99.44 billion . Cumulative inflows into U.S. spot Bitcoin ETFs surpassed $50 billion, signaling growing acceptance among traditional investors . However, the ETF-driven bullish narrative faced a temporary pause as traders locked in gains after a record-breaking week. The Alternative.me Crypto Fear & Greed Index rose to 70, reflecting euphoric sentiment but also highlighting the risk of profit-taking FXStreet^[5].

Looking ahead, the path for Bitcoin and altcoins remains contingent on macroeconomic developments and technical resilience. If Bitcoin holds above $120,000, analysts suggest it could retest $128,000, while a breakdown below $118,000 might trigger a deeper correction Cointelegraph^[4]. Ethereum and XRP's trajectories depend on whether buyers step in at key support levels. Meanwhile, continued ETF inflows and institutional adoption could provide a long-term floor for prices, even amid short-term volatility .