Bitcoin Drops Below $112K, Ethereum Under $4K in Market Pullback

Just hours after nearing a peak of $114,000 on September 25, Bitcoin experienced a significant reversal, with its price plunging to approximately $111,500 before a slight rebound to $111,800, according to data from CoinGecko. This pullback pushed BTC well below the $112,000 threshold and reduced its market capitalization to $2.23 trillion. The downturn was even more pronounced for Ethereum, the second-largest cryptocurrency by market cap, which slid below the psychologically significant $4,000 mark for the first time in nearly two months. Despite a minor recovery that pushed ETH back above that level, the asset posted a 13% weekly loss, underscoring the severity of the recent correction.

The negative momentum was not confined to the top two cryptocurrencies. Major altcoins, including Binance Coin (BNB), Solana (SOL), Cardano (ADA), and Avalanche (AVAX), found themselves deep in negative territory. This broad-based decline highlights the high correlation often observed within the crypto market during periods of heightened volatility. The total market capitalization for the sector fell to approximately $3.93 trillion, reflecting a 1.4% decrease on the day.

The immediate catalyst for the sell-off appears to be recent commentary from Federal Reserve Chair Jerome Powell, who highlighted troubling signs within the US economy. His remarks cast a shadow of uncertainty over future macroeconomic policy, prompting a risk-off sentiment that particularly affected speculative assets like cryptocurrencies. This created a stark contrast with traditional safe-haven assets, as gold continued its upward climb during the same period.

This divergence prompted a strong reaction from economist Peter Schiff, a long-time crypto skeptic, who declared that the cryptocurrency market had entered a bear phase. However, his theory was swiftly dismissed by many members of the crypto community. Proponents argue that the current cycle still has considerable room for growth, viewing the pullback as a healthy correction within a longer-term bull trend rather than the start of a prolonged downturn.

The bearish sentiment engulfed the vast majority of the altcoin market. The sharp declines in assets like BNB, SOL, ADA, and AVAX demonstrated that the selling pressure was widespread. Bitcoin’s dominance—its share of the total cryptocurrency market cap—remained stable at 56.9%, indicating that the flagship cryptocurrency did not significantly outperform or underperform the broader altcoin complex during this specific downturn.

Amid the sea of red, a few tokens managed to buck the trend. Flare (FLR), MYX Finance (MYX), Bitget Token (BGB), and OKB (OKB) were notable exceptions, trading in positive territory. The resilience of these specific assets, often tied to particular exchange ecosystems or niche protocols, suggests that investor interest remains active in select areas, even during broader market stress.

The recent price action serves as a stark reminder of the cryptocurrency market’s sensitivity to macroeconomic cues and its inherent volatility. The clash of narratives—between traditional economists like Schiff and the optimistic crypto community—underscores the ongoing debate about the fundamental drivers of digital asset valuations. While the short-term trajectory remains uncertain, hinging on further developments from the Federal Reserve and broader economic data, the market’s reaction will be closely watched for signs of either consolidation or a deeper correction.

For now, investors are grappling with the dual forces of macroeconomic caution and cyclical optimism. The drop below key psychological levels for both Bitcoin and Ethereum has undoubtedly tested bullish convictions, but the swift rebuttal of bear market claims indicates that underlying confidence in the asset class persists. The coming days will be critical in determining whether this pullback is a temporary stumble or the beginning of a more significant shift in market structure.