Bitcoin Price Analysis: BTC Drops To Lowest Level Since August As Gold Market Cap Hits $30T

Bitcoin (BTC) slumped to its lowest level since August, dropping to a low of $103,516 before moving to its current level of $105,598. The flagship cryptocurrency is down over 2% during the ongoing session, with sellers in control. 

According to JPMorgan analysts, the downtrend is likely due to crypto-native investors rather than institutional investors. The analysts believe traders may be deleveraging overleveraged momentum. Regional banking stress spilling over into crypto has also impacted investor sentiment. 

Gold Market Cap Surges 

Gold’s market capitalization reached a staggering $30 trillion on Thursday as its value surged to a new all-time high of $4,357 per ounce. Gold’s market cap is now 14.5 times larger than Bitcoin’s (BTC) market cap, and 1.5 times larger than the combined market capitalization of the “Magnificent 7” tech companies (Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, and Tesla). Unlike a company’s market cap, gold’s market capitalization is calculated by the value of all the gold that has ever been mined. However, it is impossible to know the exact figure. 

The price of gold has soared this year, rising 64% since January 1 as traders flock to the asset amid geopolitical tensions, tariff uncertainty, and dollar debasement. Analysts believe capital will eventually find its way to BTC once gold’s rally cools. Crypto analyst Sykodelic stated, 

“Gold added over $300 billion to its market cap today. It’s been adding an entire Bitcoin market cap in one week. I don’t understand how most cannot see that as soon as gold stalls, BTC is going to rip.”

Crypto Selloff Driven By Native Investors 

JPMorgan analysts believe last week’s selloff was driven by crypto native investors rather than institutional players or ETF holders. JPMorgan managing director Nikolaos Panigirtzoglou and his team believe there is very little evidence to support the involvement of institutional players and ETFs in the market crash. The analysts noted minimal outflows from Bitcoin and Ethereum. CME Bitcoin Futures also saw minimal liquidations, indicating the downturn was due to deleveraging by momentum and quant traders. 

Overleveraged traders were caught off guard by a tweet by President Trump. The downturn triggered a cascade of liquidations, leading to one of the largest market crashes on record. 

Newsmax Plans Bitcoin Treasury 

News outlet operator Newsmax has announced plans to purchase up to $5 million in Bitcoin and TRUMP over the next year as part of its strategic crypto reserve plan. The company stated that its board of directors approved the plan on Thursday. According to Newsmax CEO Christopher Ruddy, the TRUMP coin’s success has been impressive. If acquired, it will make Newsmax the first NYSE-listed firm to purchase the token. 

Referring to Bitcoin, Ruddy called it the gold standard, stating, 

“We believe it would be an important company marker to add this asset to our company reserves.”

The company also plans to make its first Bitcoin purchase soon. However, it has not shared any details about how it plans to fund additional acquisitions. 

“Additional cryptocurrency acquisitions will be evaluated based on market conditions, operational requirements, and strategic objectives.”

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) plunged to levels not seen since August, falling to a low of $103,516 during the ongoing session. The flagship cryptocurrency has struggled to regain momentum since Friday’s flash crash and extended its downtrend this week, despite a brief recovery over the weekend. The price is down over 2% during the ongoing session, trading around $106,041.

Cryptocurrency markets faced further stress as regional bank stress spilled over into crypto, echoing a similar pattern that unfolded in 2023. The cryptocurrency market has reacted adversely to concerns over US regional banking stocks, which began falling in March 2023. At the time, BTC and other altcoins registered a sharp flash crash before markets rebounded. Trading resource, the Kobeissi Letter, explained in a post on X, 

“Confused about what's happening with regional bank stocks? Here's the real issue: In March 2023, regional bank stocks collapsed, the crisis was ‘contained,’ but nothing really changed. Banks that took outsized risk were either ‘backstopped’ by the US government or acquired by JPMorgan. As a result, this further incentivized taking on outsized risk, particularly as deposits over the $250,000 FDIC limit are now inherently ‘insured.’”

The post went on to explain why markets were crashing, stating, 

“Today, shares of Zions Bancorp crashed -13% after it disclosed a $50 million charge-off for a loan underwritten by its subsidiary. And, Western Alliance Bank stock fell -12% after it said it’s dealing with a borrower that failed to provide collateral loans in the first position.”

BTC traded in bullish territory last week, and began the previous week with a 1.41% increase to $122,318. The price registered a marginal rise on Saturday before reaching an intraday high of $125,750 on Sunday. BTC ultimately ended the weekend at $123,520, up 0.87%. Buyers retained control on Monday as the price rose 0.97% and settled at $124,720, but not before reaching an intraday high of $126.296. BTC lost momentum on Tuesday, falling almost 3% to $121,393. The price recovered on Wednesday, rising nearly 2% and settling at $123,343. Selling pressure returned on Thursday as BTC fell 1.32% to a low of $119,713 before settling at $121,714.

Source: TradingView

BTC and the crypto market crashed on Friday after President Trump announced 100% tariffs on Chinese goods and new export controls for software. The announcement was made in retaliation for China's imposition of restrictions on rare earth mineral exports. As a result, BTC plunged to $102,000 on Binance before recovering and settling at $112,980. Selling pressure persisted on Saturday as the price fell almost 2% to $110,768. Despite the overwhelming selling pressure, markets recovered on Sunday. As a result, BTC rose nearly 4% to reclaim $115,000 and settle at $115,067. The price faced selling pressure and volatility on Monday, ultimately registering a marginal increase and settling at $115,274. Selling pressure returned on Tuesday as BTC fell to an intraday low of $109,945. It recovered from this level to reclaim $113,000 and settle at $113,068, ultimately dropping 1.91%. Sellers retained control on Wednesday as the price fell 2% to $110,804. Bearish sentiment persisted on Thursday as BTC fell below $110,000 and settled at $108,198. Selling pressure has intensified during the ongoing session, with the price down over 2% at $105,941.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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