Bitcoin falls 7% after record rally: What lies ahead?

Bitcoin dropped nearly 3 percent on August 18 to slip below the $115,000-mark in the afternoon. The crypto token has seen significant downfall in recent days, after hitting an all-time high of over $124,457 on August 14, according to data on Coin MarketCap. The crypto token has so far fallen more than 7 percent since then.

In Indian currency terms, the sharp fall implies that bitcoin got cheaper by nearly Rs 8 lakh per token after the four-day fall. The crypto token is so far up nearly 21 percent in the past six months, and nearly 26 percent in 2025 so far. Bitcoin has rallied a whopping 102 percent in the past one year.

The sharp fall in the crypto's prices comes as investors may have booked profits at elevated levels. After a massive rally, the momentum behind the crypto treasury boom appears to be losing steam, said Caroline Mauron, co-founder of Orbit Markets, to Bloomberg. The market "has seen continued profit-taking since a new all-time high printed last week", she added.

"Bitcoin’s climb toward record levels is drawing attention, but such moves often reflect broader economic stress rather than purely organic growth. In periods of rising inflation or currency devaluation, Bitcoin tends to behave like digital gold, attracting capital as a hedge. Meanwhile, Japan is preparing to launch its first yen-backed stablecoin this fall, signaling a shift in the global stablecoin market traditionally dominated by dollar-backed assets," said Himanshu Maradiya, Founder and Chairman, CIFDAQ.

"Despite long-term optimism, crypto markets are facing short-term turbulence. Bitcoin and Ethereum have pulled back from recent highs amid hotter U.S. inflation data, trade tensions, and shifting expectations for interest rate cuts. Over $600 million in liquidations, profit-taking near resistance levels, and declining flows into decentralized finance have amplified the correction. Ethereum has also lagged Bitcoin, adding further pressure. With high leverage still in play, macroeconomic headwinds and regulatory uncertainty could continue fueling volatility in the months ahead," Himanshu Maradiya added.

Other cryptocurrencies also declined, tracking the movement in the world's largest cryptocurrency. Ethereum declined nearly 7 percent in one day to trade at $4,246. Solana however was trading more than 2 percent higher at $181 apiece.

Cryptocurrency overall has seen strong rise this year so far, after Donald Trump took charge as the President of United States. Trump, who has proclaimed himself as a "crypto president", had urged policymakers to revamp rules in favor of the industry. "I will make sure the US is the Crypto Capital of the World. We are MAKING AMERICA GREAT AGAIN!" he had earlier posted on his Truth Social platform.