After several days of green numbers, the crypto market has turned red once again. Bitcoin (BTC), which earlier this week traded above $111,000, has now fallen back to around $107,000. The world‘s largest cryptocurrency has lost roughly 2.5% in the past 24 hours, while other major coins have also seen steep declines. Strikingly, this downturn comes at a time when traditional stock markets are performing strongly.

From recovery to retreat

Bitcoin appeared to be recovering nicely. After weeks of choppy trading, the coin managed three consecutive days of gains, peaking at $111,700. But that upward momentum quickly faded. Between Monday night and early Tuesday morning, BTC slipped below $111,000 and then $110,000, dropping further to below $108,000 — a level analysts consider crucial to hold if the recovery is to continue in the medium term.

Crypto analyst CryptoAmsterdam called $108,000 “the level you ideally want to see bounce.” If that fails, a move back toward $105,000 or even $103,000 could be on the table.

Altcoins take a hit

Where Bitcoin turns red, altcoins tend to follow — and often more sharply. Ethereum (ETH) fell from nearly $4,100 to below $3,900, losing almost 5% in a single day. Binance Coin (BNB) and Solana (SOL) performed even worse, dropping by 5.6% and 4.6% respectively. Dogecoin (DOGE) and Cardano (ADA) also lost close to 4%. Only Ripple (XRP) and Chainlink (LINK) managed to limit their losses, though both slipped slightly into the red.

The contrast with the stock market is notable: the S&P 500 nearly touched a new record high, making Bitcoin‘s drop all the more puzzling.

Why is Bitcoin falling now?

The timing of the decline is curious, as broader market sentiment seemed to be improving. Several factors appear to be influencing the pullback:

• 1. Credit stress in the United States: Recent pressure on U.S. credit markets pushed interest rates higher, sparking fears of a repeat of the 2023 banking crisis. However, experts like former Federal Reserve trader Joseph Wang argue that the current situation is “completely normal” and poses no systemic risk.
• 2. Profit-taking after gains: Following three consecutive days of growth, traders began taking profits, adding to selling pressure. Levels around $111,000 are known psychological resistance zones where short-term traders often cash out.
• 3. Technical resistance: The $111,000–$112,000 range remains a tough ceiling for Bitcoin. Until the price breaks through convincingly, the risk of further corrections persists.

At the same time, geopolitical developments should, in theory, favour risk assets like Bitcoin. Japan‘s new prime minister, Sanae Takaichi, is known for her pro-stimulus stance, and U.S.–China trade tensions appear to be easing. The fact that Bitcoin is still falling suggests that technical and short-term trading dynamics currently outweigh macro optimism.

What are analysts expecting now?

Most analysts remain cautiously optimistic in the short term. As long as Bitcoin holds above $108,000, a rebound toward $112,000 is possible. A strong breakout above that level could signal renewed bullish momentum.

Investors are also watching Friday‘s U.S. Consumer Price Index (CPI) release closely. The data will be key for the Federal Reserve‘s next interest rate decision. A lower-than-expected inflation reading could increase the likelihood of rate cuts — a scenario generally positive for Bitcoin and other digital assets.

Cautious optimism endures

While the sudden dip may sting after days of recovery, there‘s no reason to panic. Bitcoin‘s fundamentals remain solid, and market liquidity continues to improve. As is often the case at this stage of the cycle, volatility is high and emotions are running strong.

If Bitcoin can maintain support above $108,000, a renewed upward move could follow. Should that level break, traders will look again to the $105,000 zone as a potential pivot point. The coming days will be crucial: will Bitcoin hold its ground, or are more red candles still to come before the next rally?

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before investing.