Bitcoin Dips Below $100K Despite Bullish Macro News

The cryptocurrency market experienced a severe correction this week that saw Bitcoin dip below $100,000 on multiple occasions, marking its first breach of this psychological support level in nearly five months. This decline occurred despite what should have been bullish macroeconomic developments, including a 25 basis point interest rate cut by the US Federal Reserve and significant progress in the trade war between Washington and Beijing. Typically regarded as positive catalysts for risk-on assets, these developments failed to prevent Bitcoin’s slide from $106,500 last Thursday to a weekly low of $99,000 by Tuesday.

The broader market followed Bitcoin’s lead, with total cryptocurrency market capitalization standing at $3.430 trillion amid $198 billion in 24-hour trading volume. Bitcoin dominance remained relatively stable at 58.2%, indicating the sell-off was widespread across the digital asset ecosystem. Ethereum plunged to $3,200, representing a 15.7% weekly decline, while XRP dropped 12.7% to approach the $2.20 level. Other major cryptocurrencies including BNB, SOL, DOGE, ADA, LINK, and BCH all suffered significant losses, creating a sea of red across crypto markets.

Despite the broad market weakness, two outliers managed to buck the trend. ZEC surged 73% while ICP posted an impressive 163% gain, though these isolated rallies provided little comfort to investors watching their Bitcoin and Ethereum holdings deteriorate. The market’s inability to capitalize on traditionally positive macroeconomic news has left analysts searching for explanations behind the unexpected downturn.

Market observers have identified several factors contributing to the current crypto correction, with weak investor sentiment and deteriorating fundamentals topping the list. Arthur Hayes, former CEO of BitMEX, tied the next potential Bitcoin rally to the resolution of the ongoing US government shutdown, which set a new record earlier this week. Hayes believes that once the political impasse ends, Bitcoin will be positioned for a significant recovery. This view found some support from Raoul Pal, who similarly suggested that the end of quantitative tightening could provide the necessary catalyst for renewed bullish momentum.

The sentiment analysis firm Santiment highlighted another concerning pattern among Ethereum traders. Following ETH’s brief bounce from under $3,200 to $3,500, social media sentiment turned overwhelmingly bullish—a development that historically serves as a bearish contrarian indicator. The subsequent decline back to $3,200 validated this pattern, demonstrating how crowd psychology continues to influence crypto market movements despite fundamental developments.

The market weakness coincided with political developments involving former President Donald Trump, who pardoned Binance founder Changpeng Zhao last week. In a curious twist, Trump subsequently claimed he didn’t know Zhao and attributed the decision to his sons. The pardon followed Zhao’s four-month prison sentence and $50 million penalty in 2024, though the market impact of this political development remains unclear amid the broader sell-off.

While macroeconomic factors dominated price action, significant industry-specific developments also captured market attention. Balancer, one of the oldest and largest names in the decentralized finance space, suffered a devastating $128 million exploit attributed to a faulty smart contract check. The hack represents one of the largest DeFi security breaches in recent memory and has raised fresh concerns about the maturity of smart contract auditing processes in the rapidly evolving sector.

In contrast to the Balancer exploit, Ripple enjoyed a banner week with CEO Brad Garlinghouse announcing a $500 million funding round led by Pantera Capital and Citadel Securities. The investment values the company at $40 billion and represents a significant vote of confidence in Ripple’s vision despite ongoing regulatory challenges. The company further bolstered its infrastructure by acquiring Palisade, a digital asset wallet and custody provider, positioning itself for expanded services in the institutional digital asset space.

These contrasting narratives—security vulnerabilities in established DeFi protocols versus massive funding rounds for centralized entities—highlight the ongoing maturation pains within the cryptocurrency industry. As Bitcoin struggles to maintain the $100,000 level that many investors viewed as a key support, the market faces a critical test of whether bullish fundamentals can eventually overcome current technical weakness and negative sentiment.