Bitcoin drops below $105K (BTC), falling below the mark, a key psychological and technical threshold that many traders had been watching closely. This led to another drop in the cryptocurrency market. This change has led to a more significant decline in the altcoin market, causing top-performing cryptocurrencies like Ethereum (ETH), Solana (SOL), and Cardano (ADA) to lose some of their recent gains.
As traders adjust their plans following this drop, the most recent news suggests that prices will be more volatile, positive momentum will slow, and there will be increased uncertainty about what will happen in the short term. This detailed market update provides in-depth analysis of why Bitcoin’s price declined, why altcoins followed suit, the technical and fundamental factors that triggered the correction, and what investors can expect next.
Bitcoin’s Big Drop: What Caused It to Fall Below $105K?
In early 2025, Bitcoin reached new all-time highs due to increased institutional acceptance, a surge in capital flowing into ETFs, and a global trend toward digital assets as a means of protecting against inflation and monetary instability. However, despite BTC’s strong performance over the last few months, the market was taken aback by its inability to hold support at $105,000.
It appears that the drop is a result of a combination of broader economic factors and on-chain dynamics. Bearish sentiment has grown as U.S. Treasury yields rise, Federal Reserve Chair Jerome Powell makes hawkish comments, and concerns resurface about regulatory crackdowns in key crypto markets, such as the European Union and South Korea. Additionally, whales and institutions that made substantial profits by selling Bitcoin in the $60,000–$80,000 range have contributed to the sell pressure.
On-chain statistics from sites like Glassnode and CryptoQuant indicate surges in exchange inflows. This suggests that individuals who own cryptocurrencies are transferring them to centralized exchanges to sell or rebalance their portfolios. The Bitcoin Fear and Greed Index, a key indicator for measuring sentiment, has also entered the “Fear” zone for the first time since February 2025.
Altcoins Follow: Ethereum, Solana, and Others Drop Sharply
As is common during significant BTC corrections, altcoins have become more volatile, with several of them experiencing a price decline greater than that of Bitcoin itself. Ethereum, which had just surged beyond $6,000 due to excitement about Ethereum 2.0 staking and increased DeFi usage, is currently around $5,400—a decrease of about 10% in just 24 hours.
Solana, once dubbed the “Ethereum killer,” has suffered the most, dropping more than 12% in response to the market-wide collapse. Investor confidence has been eroded by factors such as decreased engagement in DeFi and concerns about network disruptions. Similarly, Cardano, Avalanche, and Polkadot have all experienced losses exceeding 10%.
Memecoins like Dogecoin and Shiba Inu, which are often driven by social media excitement and attention from regular people, have also lost ground recently. This shows that speculative traders are becoming more cautious.
Technical Analysis: Has the Bull Run Stopped or Just Taken a Break?
Bitcoin’s inability to stay above $105,000 from a technical perspective indicates that it has broken below a critical support zone that was previously a resistance zone. The 50-day exponential moving average (EMA), which traders use to measure momentum, has now been broken. The Relative Strength Index (RSI) has also fallen below 50, indicating that bearish momentum may be brewing.
TradingView and Cointelegraph Markets Pro say that the next significant support level for BTC is at $98,000. After that, there are stronger institutional buy zones between $92,000 and $95,000. If the price bounces off these levels with significant volume, it could indicate that the market is undergoing a healthy correction within a larger bullish trend.
The market structure for cryptocurrencies will largely follow that of Bitcoin. If BTC makes a strong comeback, it might help altcoin holders. However, if it remains weak, money could flow back into Bitcoin, making the altcoin market share even smaller.
What is going on in the world: rules, interest rates, and people’s feelings
This decline also demonstrates how macroeconomic factors are having a more significant impact on the bitcoin market. Central banks are becoming more cautious about loosening monetary policy, as inflation is proving to be stickier than initially thought in major economies. The dollar index (DXY) has increased because the Federal Reserve has hinted that it will put off cutting interest rates. This has put pressure on risk-on assets, such as cryptocurrencies.
Geopolitical tensions, especially between China and Taiwan, and the current war in Ukraine, have made things even more unclear. As a result, global investors are seeking safe places to invest their money, such as gold and government bonds, rather than digital assets that are likely to fluctuate in value.
Additionally, the new Markets in Crypto-Assets (MiCA) rule, which went into effect in the EU, has raised some short-term concerns, particularly among exchanges and DeFi platforms that are uncertain about their compliance obligations. These changes in the rules are likely causing people to withdraw their money from risky cryptocurrency investments.
How institutions reacted: ETF flows and stocks in bitcoin mining
Bitcoin ETFs, particularly those from BlackRock, Fidelity, and Grayscale, have been a significant component of the capital influx into the market in late 2024 and early 2025. However, the most recent drop has also seen some of these funds lose money, which shows that institutions are less interested in them in the short term.
Bitcoin mining stocks, such as Marathon Digital Holdings (MARA) and Riot Platforms (RIOT), have also declined, performing worse than the IT sector as a whole. People typically view these stocks as leveraged plays on Bitcoin, and they tend to have a higher beta, which makes them more susceptible to significant price corrections.
What’s Next? Price Recovery or More Correction?
Most analysts believe that this is a healthy pullback, rather than the start of a prolonged bear market, despite the generally gloomy mood at present. In the past, Bitcoin declines of 15% to 25% have preceded significant rallies, notably during intense economic cycles and halving years. The next Bitcoin halving event, scheduled for 2028, remains an important reason to be bullish, as long-term holders continue to believe in the asset’s fundamentals.
Additionally, developers and communities surrounding major altcoins are generating innovative ideas. The Ethereum vision for scaling through Layer 2 solutions, such as Arbitrum and Optimism, remains in place. Solana’s ecosystem is growing through partnerships with gaming platforms and fintech companies. Investors should also closely monitor the movements of stablecoins, particularly those involving Tether (USDT) and USD Coin (USDC). Stablecoins can bring significant funds into the crypto market.
User Intent Coverage: Who Is Affected and What to Do
The recent drop presents a good opportunity for retail investors to review their portfolios and avoid panic selling. For institutional investors, it may be an opportunity to acquire high-quality assets at lower prices. Market corrections typically make things clearer for developers and entrepreneurs, allowing long-term ventures to shine.
Many traders are now examining on-chain metrics, macro signals, and developer activity, rather than focusing on short-term price action, to make more informed decisions. This is because of the long-term fundamentals.
