Bitcoin has dropped 7.5% from its all-time high of $124,000 to $115,000 in just one week. The direct cause is attributed to the U.S. July Producer Price Index (PPI) rising 3.3% year-on-year, which dampened expectations of a September rate cut.
However, looking at ETF fund flows, this is not a simple 'panic selling'. While some products saw outflows, BlackRock's Bitcoin spot ETF actually saw inflows. The same goes for Ethereum ETFs. Experts analyze that "investors have not left the market, but rather switched to products with lower fees".
The Fear and Greed Index, which shows market sentiment, is maintaining a 'neutral' at 56. This is markedly different from past bear markets. Additionally, Treasury Secretary Scott Besent has opened the possibility of government support by reviewing a 'budget-neutral' approach to establishing a Bitcoin strategic reserve.
The upcoming variable is this week's Jackson Hole Symposium. If Jerome Powell, the Fed Chairman, makes a dovish statement, the market could quickly reverse. The U.S. unemployment claims to be announced on the 21st are also expected to influence investment sentiment.
In the short term, if the support level of $115,000 breaks, it could continue to adjust to $110,000. However, considering the institutional investors' 'bottom-fishing' movements, this decline is gaining perspective as a new buying opportunity rather than a simple risk signal.
