Cryptocurrency markets faced a sharp decline at the start of the week, as mounting macroeconomic concerns triggered more than $500 million in forced liquidations of long positions.

Bitcoin slipped 1.1% to $116,394.87 after hitting a record high of $124,496 last week – its fourth all-time high this year. At one point during trading, Bitcoin fell to a daily low of $114,706. Ethereum also dropped 2.5% to $4,354 after nearing its record of around $4,800 last week. The decline came after July’s producer inflation data came in hotter than expected, raising doubts over a Federal Reserve rate cut in September.

Profit-taking drove broad market liquidations. According to CoinGlass data, 123,836 traders were liquidated over the past 24 hours for a total of $530.79 million, including about $124 million in Bitcoin longs and $184 million in Ether. Such liquidations occur when traders are forced to sell assets at market price to cover debts, exerting further downward pressure.

Investor sentiment was further dampened by Treasury Secretary Scott Bessent, who clarified Thursday that President Donald Trump’s Bitcoin strategic reserve announced in March would be limited to government-seized coins, as part of a “fiscally neutral” approach to expanding holdings.

Major cryptocurrencies fell alongside blue-chip tokens, with the CoinDesk 20 index, which tracks the broader market, down 1.2%. Crypto-linked stocks also declined, with Bitmine Immersion down 5.4% and Bullish, which went public last week, sliding 8.9%. Coinbase gained 1.0% while Galaxy Digital rose 2.2%.

Focus on Jackson Hole

Investors this week await the Federal Reserve’s annual economic symposium in Jackson Hole, Wyoming, for clues on upcoming monetary policy decisions. Crypto traders also look to Thursday’s jobless claims data.

Last week’s record tests for Bitcoin and Ether surprised traders who had expected seasonal weakness in August, seeing macro concerns overshadow institutional adoption momentum until the Fed’s September meeting. Still, many view the pullback as more strategic than alarming, supported by ongoing demand from ETFs and companies steadily buying Bitcoin and Ether.

Despite net outflows from Bitcoin and Ethereum ETFs on Friday, the week ended with $547 million in net inflows for Bitcoin and a record $2.9 billion for Ethereum – marking Ether’s 14th consecutive week of inflows. Bitcoin remains little changed month-to-date, while Ether is up 15%.

Geopolitics and Fed Policy Add Pressure

Political uncertainty has also weighed on sentiment, as markets reacted to Monday’s White House summit where President Trump met Ukrainian President Volodymyr Zelensky and European leaders to discuss peace efforts.

Trump hinted at potential direct talks with both Moscow and Kyiv, and even a possible trilateral summit, while Zelensky expressed cautious optimism without concrete outcomes. The lingering geopolitical risks added pressure on high-risk assets such as cryptocurrencies.

Attention also turns to Fed Chair Jerome Powell’s speech Friday in Jackson Hole. With expectations for a larger September rate cut fading, markets now price in an 83% chance of a 25 basis-point cut, down from bets on a more aggressive move.

Companies Buy the Dip

Despite Tuesday’s drop below $115,000 – nearly 6% off the recent record – treasury firms such as Metaplanet and Strategy added a combined 1,185 Bitcoin Monday, taking advantage of lower prices.

According to QCP Capital, implied volatility remains relatively low, suggesting markets do not expect a major price breakout. Analysts said: “Range-bound trading is likely to persist, with dips near $112,000 attracting buyers and rallies toward $120,000 meeting selling pressure – at least until Powell’s speech Friday.”

CryptoQuant data on long-term holder (LTH) profitability show current levels remain positive yet moderate, with profits below peaks from 2017, 2018–2019, and 2022–2023 cycles. This suggests Bitcoin trades near historic highs but with manageable selling pressure, leaving room for further upside.

Outlook: Momentum Indicators Show Weakness

Bitcoin peaked at $124,474 last Thursday but quickly lost momentum, sliding 4% the same day to settle around $117,300 over the weekend. On Monday it extended losses to close below $116,300. As of Tuesday, it continued lower, breaking the uptrend line established since early April.

If Bitcoin closes below the 50-day exponential moving average (EMA) at $115,046 and the daily uptrend line, losses could extend toward the next support at $111,980.

On the daily chart, the Relative Strength Index (RSI) stands at 44, below the neutral 50, reflecting bearish momentum. The MACD also flashed a negative crossover Sunday, sending a sell signal suggesting further downside.

However, if Bitcoin finds support near the EMA at $115,046 and closes above $116,000, chances for recovery toward the key $120,000 level could improve.

Oil prices fell on Tuesday as traders assessed the possibility that talks between Russia, Ukraine, and the United States to end the war could lead to lifting sanctions on Russian crude, which may increase supply in the markets.

Brent crude futures fell 48 cents, or 0.72%, to $66.12 a barrel by 08:20 GMT. US West Texas Intermediate crude for September, which expires Wednesday, fell 40 cents or 0.63% to $63.02 a barrel. The more active October contract dropped 46 cents or 0.73% to $62.24 a barrel. Prices had closed about 1% higher in the previous session.

These moves came after a White House meeting on Monday that brought together US President Donald Trump, Ukrainian President Volodymyr Zelensky, and several European allies. Trump said in a social media post that he had spoken with Russian President Vladimir Putin, noting arrangements for a meeting between Putin and Zelensky that could evolve into a trilateral summit.

Suvro Sarkar, senior energy analyst at DBS Bank, said: “Oil prices are reacting mainly to the outcomes of the recent Trump-Putin and Trump-Zelensky meetings. While a peace deal or ceasefire does not appear imminent, some progress has been made.” He added that the chances of escalation or tighter US and European sanctions on Russia have diminished for now.

Sarkar also noted that Trump’s softened stance on secondary sanctions imposed on importers of Russian oil reduced risks of disruptions to global supplies, helping ease geopolitical tensions.

For his part, Zelensky described his talks with Trump as “very good,” pointing to discussions on US security guarantees for Ukraine, which Trump confirmed, though the scope of support remains unclear.

Trump continues to push for a swift end to the deadliest war in Europe in 80 years, while Kyiv and its allies fear the US president may seek to impose a deal with terms favoring Moscow.

Bart Melek, head of commodity strategy at TD Securities, said in a note: “Any outcome that leads to easing tensions and removing the threat of tariffs or secondary sanctions will gradually drive oil prices down toward our target average of $58 a barrel in Q4 2025 and Q1 2026.”

The US dollar declined against most major currencies on Tuesday, as markets continued to assess the results of the summit that brought together leaders from the United States, Europe, and Ukraine, while investors await the monetary policy signals expected from the Federal Reserve’s annual symposium in Jackson Hole at the end of the week.

Both the euro and the British pound recorded limited moves between gains and losses against the dollar, rising in late trading by about 0.2% and 0.1% to $1.1683 and $1.3520 respectively, while both the Japanese yen and the Swiss franc posted slight gains.

During the summit, US President Donald Trump assured his Ukrainian counterpart Volodymyr Zelensky that the United States would help guarantee Ukraine’s security in any agreement to end the war with Russia. This came during a meeting at the White House, which was also attended by a number of European allies, following Trump’s meeting with Russian President Vladimir Putin in Alaska last Friday.

However, these developments did not give markets a clear direction in the foreign exchange markets, while European stocks recorded slight gains. Sami Shaar, chief economist at Lombard Odier, said that the relatively low energy costs in Europe and its lack of exposure to developments in the war make it unlikely that these issues will be a major market driver.

Summer holidays in the northern hemisphere also contributed to lower liquidity levels, which was reflected in weak trading volumes.

On the macro level, investors are awaiting the outcome of the Jackson Hole symposium, during which Fed Chairman Jerome Powell will speak about economic prospects and the monetary policy framework. Although markets are pricing in with more than 80% probability a rate cut in September, according to the CME FedWatch tool, analysts expect Powell to avoid committing to a clear policy path before August data is released.

Shaar said: “The market expects signals confirming that the September cut is guaranteed, but I’m not sure that this is what will happen.”

According to analysts at DBS, Powell is likely to send a balanced message, “keeping the door open for a preventive rate cut to avoid further deterioration in the labor market, while at the same time warning against excessiveness or haste in the cuts.”

The Fed’s July meeting minutes are due on Wednesday, which may reveal insights into policymakers’ thinking regarding the rate path, although the meeting preceded a weak jobs report that led investors to price in the cut more strongly.

As for other currencies, the Hong Kong dollar was among the notable movers, rising 0.3% to 7.7944 against the US dollar as interbank interest rates climbed to the highest level in three months, within the narrow trading band allowed between 7.75 and 7.85.

Digital currencies, meanwhile, were dominated by declines, with Bitcoin falling 1.5% to mark a third straight day of losses after hitting a record high last week, while Ethereum dropped 2.7%.

The Australian and New Zealand dollars remained stable, while the Swedish krona rose 0.3% to 9.5360 against the US dollar.

Gold prices rose cautiously in the European market on Tuesday, stabilizing within a limited trading range above the lowest level in two weeks, supported by the current decline in US dollar levels in the foreign exchange market.

This cautious rise comes as investors refrain from building large buying positions, while awaiting the launch of the annual Jackson Hole Economic Symposium, where a number of major central bank governors are scheduled to speak, led by Federal Reserve Chairman Jerome Powell.

Price Overview

• Gold prices today: Gold rose by about 0.3% to ($3,341.87), from the opening level of ($3,332.57), recording a low of ($3,326.18).

• At Monday’s settlement, gold lost 0.1% and recorded the lowest level in two weeks at $3,323.64 per ounce, pressured by the rise in the US dollar and Treasury yields.

US Dollar

The dollar index fell on Tuesday by more than 0.1%, reflecting a renewed decline in the US currency against a basket of major and minor counterparts, which favors higher prices of gold and other dollar-denominated metals.

US Interest Rates

• According to the CME FedWatch Tool: Market pricing for a 25 basis point rate cut in September is currently steady at 84%, while the probability of rates remaining unchanged is at 16%.

• Market pricing for a 25 basis point rate cut in October is currently steady at 92%, with only 8% for no change.

• To reassess these expectations, markets await Fed Chair Jerome Powell’s speech on Friday at the Jackson Hole Symposium.

Gold Outlook

• Capital.com market analyst Kyle Rodda said: “Gold remains stable and is eagerly awaiting a new catalyst for an upward move. I think the most important event to watch is Jackson Hole and whether the Fed will provide cautious guidance.”

• Rodda added: “If a peace deal is reached between Ukraine and Russia—which is unlikely—that would be a very negative surprise for gold prices.”

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world’s largest gold-backed ETF, remained unchanged on Monday, with the total at 965.37 metric tons, the highest level since September 9, 2022.