Bitcoin Dips to $122K as Crypto Rally Gets Overheated. What Next?

The crypto rally took a pause on Tuesday with bitcoin (BTC) quickly pulling back from record highs above $126,000 as analysts pointed to signs of crypto rally overheating, at least in the short ￰0￱ plunged below $122,000, erasing the past three days of gains and trading 2.4% lower in the 24 ￰1￱ selloff rippled across the crypto market, with XRP (XRP), dogecoin (DOGE), Cardano (ADA) and Avalanche (AVAX) down 5%-7% during the ￰2￱ the price action in bitcoin appears familiar, that's because it ￰3￱ a 31% gain year-to-date, bitcoin has given bulls very little chance to bask in their ￰4￱ record high has seemingly been met with a quick and viscous ￰5￱ the first run to $109,000 just ahead of the Trump inauguration in ￰6￱ reversed lower to $100,000 in hours and to $75,000 within three months.

July's first move above $123,000 was met with about a 10% decline over the following few ￰7￱ similar surge above $120,000 in mid-August presaged about a 15% plunge in ensuing ￰8￱ declines this time around came after bitcoin's near-vertical 16% pump off the late September lows below $109,000. Jean-David Péquignot, CCO of options marketplace Deribit, projected in a Monday report that BTC could revisit the $118,000-$120,000 zone shaking out traders who missed the lows and joined the rally ￰9￱ that pullback happens, he said, would offer a buying opportunity as technicals and the macro environment aligns for BTC to run higher above $130,000 through the last quarter of the ￰10￱ market and ETF inflows also got overheated, said Vetle Lunde, head of research at ￰11￱ noted that the past week marked the strongest BTC accumulation of the year, with a combined 63,083 BTC (worth roughly $.7 7billion) added across U.

S. ETFs, CME and perpetual futures, surpassing the May ￰12￱ surge was driven by widespread long positioning betting on higher prices without a clear macro catalyst, laying the ground for a pullback. "Historically, similar bursts in exposure have often coincided with local tops, and the current setup suggests a temporarily overheated market with elevated risk of short-term consolidation," Lunde said. Fed's Miran Says Neutral Rate Should Be 0.5% Federal Reserve Governor Stephen Miran — a recent Trump appointee — said Tuesday his view of the neutral interest rate has shifted “from one end of the range to the other,” during a discussion at the Managed Funds Association Policy Outlook ￰13￱ now believes the neutral rate should stand at 0.5%.

Miran pointed to tighter immigration restrictions and evolving expectations about the federal deficit as the main factors behind his reassessment. Miran’s comments suggest that long-term forces shaping the ￰14￱ are changing. A smaller labor pool could limit growth, while rising fiscal pressures might keep the Fed’s balancing act between inflation and employment more ￰15￱ remarks come as policymakers debate how much room the central bank has to cut rates without reigniting price ￰16￱ officials meet at the end of this month to decide about a possible further rate cut, however, without critical data coming from the government as the shutdown ￰17￱ also noted that economic growth in the first half of the year was weaker than anticipated, weighed down by uncertainty over trade and tax ￰18￱ Miran struck a more positive tone for the months ahead, saying much of that uncertainty has now cleared.

“With clearer policy signals, I expect a steadier pace of growth,” he ￰19￱ stocks suffer The broad pullback in crypto prices is hitting the related stocks, led by a 7% decline in Strategy (MSTR) and a 4% loss for Coinbase (COIN). Ether (ETH) treasury companies Bitmine Immersion (BMNR) and Sharplink Gaming (SBET) are down 3% and 7%, ￰20￱ miners are mostly in the red, led by MARA Holdings falling 4% and Riot Platforms (RIOT) 3%. Hut 8 (HUT) is lower by 2%.