Bitcoin Plunges to $122K as Crypto Frenzy Hits Boiling Point - Where’s the Bottom?

Digital gold gets a reality check as Bitcoin sheds value amid overheated market conditions.

The Correction Nobody Wanted

Bitcoin's breathtaking rally finally hits a wall at $122,000 - a level that's making even the most bullish traders sweat. The cryptocurrency that's been defying gravity for months suddenly remembers what gravity feels like.

Market Mechanics Overheated

When everyone's already bought in, who's left to push prices higher? The classic market dilemma hits crypto with brutal efficiency. Leveraged positions unwind, weak hands fold, and suddenly that 'easy money' doesn't look so easy anymore.

What Comes Next?

History suggests two paths: either this is a healthy pullback before the next leg up, or the beginning of a more significant correction. Smart money watches volume patterns and institutional flows while retail investors panic-sell at the worst possible moments - some things never change in finance.

The trillion-dollar question remains: is this a buying opportunity or the start of something uglier? One thing's certain - in crypto, the only prediction you can trust is that nobody actually knows what they're talking about.

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 2025. He 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 U.S. economy 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 complex. His remarks come as policymakers debate how much room the central bank has to cut rates without reigniting price pressures.

Fed 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 continues.

Miran also noted that economic growth in the first half of the year was weaker than anticipated, weighed down by uncertainty over trade and tax policy. But 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 said.

Crypto 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%, respectively.

BItcoin miners are mostly in the red, led by MARA Holdings falling 4% and Riot Platforms (RIOT) 3%. Hut 8 (HUT) is lower by 2%.