Bitcoin Hits $106,500, Then Falls; Ethereum Plunges as Inflation Fears Return
The crypto market started the week on a wild note, with Bitcoin soaring to $106,500 – its highest level since January – before falling 3.8% to $102,450 in a matter of hours. Ethereum, meanwhile, suffered a major blow, plunging 4.3% to $2,400.
According to data from CoinGlass, Bitcoin’s volatility has seen more than $178 million in positions liquidated in the past 24 hours, with both long and short positions split evenly. Ethereum saw an even bigger wave of liquidations, with a total of $264.4 million – of which $205.3 million were buy orders.
The move comes amid a slew of macro and regulatory factors weighing on the market. Recently, MicroStrategy – the largest Bitcoin investor under the leadership of Michael Saylor – was sued by a class action for misleading investors, just hours after the company announced the purchase of an additional $764.9 million in BTC.
On the other hand, a ruling in Australia is attracting a lot of attention when a judge recognized Bitcoin as a form of currency. According to the Australian Financial Review, this decision could pave the way for capital gains tax exemption for Bitcoin in this country.
Despite falling 1.4% on the day, Bitcoin is now only about 5.8% away from its historical peak of $108,786. In contrast, Ethereum is still trading 50.9% lower than its all-time high of $4,878 set in late 2021.
Inflation concerns from trade tensions
In addition to internal market factors, the macro context is also creating great pressure. The US Federal Reserve warned last week that President Trump’s tariff policies could lead to higher inflation. While the Fed kept its benchmark interest rate unchanged at 4.25% - 4.50%, it said it had no plans to adjust monetary policy in the near term, a move that has worried investors.
Walmart has also confirmed plans to raise prices this month due to the impact of tariffs on imports - an indicator that inflationary pressures are spreading again.
The return of meme coins
Although the mainstream market is under pressure, the meme coin segment has seen a wave of revival. Tokens such as PEPE and WIF led the recovery as retail investors returned to risk-taking, pushing trading volumes and prices up sharply.
This comeback reflects the belief that the market is entering a new growth phase after months of correction. However, with macro factors still volatile, especially related to global trade policy, analysts say the stability of cryptocurrencies remains a big unknown in the coming weeks.