Wednesday, 20 August 2025
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Bitcoin Price Threatens Drop To $112K: Is That The Bottom

Bitcoin Price Threatens Drop To $112K: Is That The Bottom

Key takeaways:

  • Bitcoin’s options market signals extreme fear, but historical patterns show potential for significant rebounds.

  • Global economic pressures from US trade tariffs negatively affected traders’ sentiment.

Bitcoin (BTC) fell below $113,000 for the first time in over two weeks, surprising traders and triggering the liquidation of $113 million in leveraged long positions. The sharp decline followed the $124,176 all-time high on Thursday, raising questions about whether the bull market is over as the macroeconomic environment grows more uncertain.

SEC investigation and corporate AI disappointments

Bitcoin’s price correction accelerated after reports that the United States Securities and Exchange Commission (SEC) is allegedly investigating fraud and stock manipulation at Alt5 Sigma, a company that recently partnered with US President Donald Trump’s World Liberty Financial in a $1.5 billion deal.

Source: X/zoomerfied

World Liberty, whose website lists President Donald Trump as “co-founder emeritus,” raised roughly $550 million through two public token sales, marketing itself as a DeFi and stablecoin platform. In June, Trump disclosed earning $57.4 million from his stake in World Liberty Financial, while Eric Trump is slated to join Alt5 Sigma’s board.

Cryptocurrency investors also reacted to a 1.5% drop in the Nasdaq 100 after MIT NANDA research, based on 150 corporate interviews and 300 public artificial intelligence deployments, found that 95% of companies failed to achieve rapid revenue growth from AI pilot programs.

US import tariffs and weakening confidence in the Fed

Another factor driving risk aversion was the US’s new 50% import duties on 407 additional aluminum- and steel-containing products. The affected items include everyday goods such as car parts, plastics, and specialty chemicals, prompting economists to raise concerns about supply chain disruptions and higher consumer prices.

UBS investment bank lifted their gold price forecast to $3,700 by September 2026, according to CNBC. UBS strategists expect gold price to rally from below-trend economic growth, Federal Reserve policy easing and a weaker dollar. Investor concerns over the US fiscal deficit and questions about Fed independence also underpin the outlook.

US Dollar Index (DXY, left) vs. gold/USD (right). Source: TradingView

Amid growing fears of economic contraction and the potential impact on companies linked to Trump’s World Liberty Financial, demand for downside protection…

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