Bitcoin was cruising near $113,700 on Thursday, but the party ended quickly when it couldn’t hold above $115,000. The 50-day moving average put a nice little cap on its hopes for a solid rebound.

The wider crypto market saw a modest 1% gain, pushing the total market cap to $3.86 trillion, but analysts aren’t calling this a comeback. It’s more like a little bounce before the next dip. Alex Kuptsikevich, chief market analyst at FxPro, summed it up perfectly:

“Bitcoin’s failed attempt to get back above $115K just shows how weak the market is.”

ETF Flows Show a Cautious Crypto Market

Caution is definitely in the air. Bitcoin ETFs saw major outflows this week, with $523 million leaving on August 19, followed by $316 million on Wednesday and $194.4 million on Thursday. Ether ETFs didn’t fare much better, losing over $500 million in the same period. Looks like profit-taking and liquidations after Bitcoin's record highs earlier in the month are starting to bite back.

Headlines Add to the Funk

To make matters worse, the news isn’t helping. The SEC is reportedly investigating Alt5 Sigma following its $1.5 billion deal with World Liberty Financial, a company tied to none other than President Donald Trump. That’s the last thing crypto needs right now.

Ethereum and Altcoins Feeling the Burn

Ethereum’s on-chain activity isn’t looking great either. Active addresses have dropped 28% since July 30, and ETH is stuck at $4,279, up just 0.4% on the day but still down over 7% from its recent highs. Analysts point out that this decline in active addresses shows softer retail participation, which could hold back any short-term gains for ETH, even if Bitcoin stabilizes.

Meanwhile, XRP and Solana are mimicking Bitcoin’s slump. XRP fell to $2.87 and Solana hit $183, both down more than 6% over the past week. Traders are hoping that a dovish Fed pivot could bring some relief, but without fresh money coming in, any rallies might be short-lived.

If you look at the derivatives markets, there’s some serious hedging going on. The 30-day delta skew in Bitcoin options hit 12% this week, the highest in four months. It’s clear that traders are gearing up for downside protection.

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Source: Giphy

What’s Really Behind Bitcoin’s Weakness?

According to Ruslan Lienkha, chief of markets at YouHodler, the current weakness in Bitcoin is mostly driven by macroeconomic factors, not crypto-specific issues.

“No significant bearish crypto-native developments are weighing on the market,” he said.

But, he added, the broader risk-off sentiment from equity markets is spilling over into Bitcoin, which is dragging prices down.

Lienkha also pointed out that it’s still unclear whether this pullback is just a short-term correction or the start of something deeper.

“Markets seem to be approaching the later stages of the bullish trend,” he said.

Looks like we’re all waiting to see if this is just a hiccup before one last push upward or the beginning of a full-blown trend reversal.

The Long-Term Picture Still Holds Promise

While the short-term outlook isn’t great, some analysts remain bullish on Bitcoin’s future. Bitwise, for example, believes that U.S. pension plan allocations could drive Bitcoin to $200,000 by year-end, even potentially outpacing the impact of spot ETF approvals. First inflows could show up as early as autumn, they say.

For now, though, all eyes are on Jerome Powell’s speech at Jackson Hole today. If Powell goes dovish, it could take some pressure off risk assets like crypto. But if he hints at reluctance to cut rates, the downward slide could continue, with Bitcoin already down 9% from its recent highs. Stay tuned, this ride isn’t over yet!

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