Bitcoin fell below $113,000, reflecting investor concerns about the U.S. economy, stock market, and crypto market. However, this volatility does not mark the end of Bitcoin’s long-term bullish trend.
Key Points:
Bitcoin’s options market shows extreme fear, but historical trends suggest a strong rebound is still possible.
Global economic pressures from U.S. trade tariffs have dampened trader sentiment.
Bitcoin’s price dropped below $113,000 for the first time in over two weeks, catching traders off guard and triggering $113 million in leveraged long position liquidations. Just a day earlier, Bitcoin had hit a new all-time high of $124,176. As macroeconomic uncertainty grows, the market is questioning whether this bull run is nearing its end.
SEC Investigation and AI Business Disappointments
The sell-off accelerated further after reports emerged that the U.S. Securities and Exchange Commission (SEC) is investigating Alt5 Sigma for alleged fraud and stock manipulation. The company recently entered into a $1.5 billion partnership with former U.S. President Trump’s World Liberty Financial.
World Liberty lists Trump as “Founder Honorary Chairman” on its official website and has raised approximately $550 million through two public token sales, positioning itself as a DeFi and stablecoin platform. In June, Trump disclosed that he earned $57.4 million from his stake in the company, while Eric Trump is set to join Alt5 Sigma’s board of directors.
Crypto investors also reacted to a 1.5% drop in the Nasdaq 100 index. The decline followed a study by MIT NANDA, which was based on interviews with 150 companies and 300 AI use cases. The study found that 95% of companies failed to achieve rapid revenue growth through AI pilot programs.
U.S. Tariffs and Weakening Fed Confidence
Another factor driving risk-off sentiment is the U.S. imposition of new 50% import tariffs on 407 aluminum and steel products, including auto parts, plastics, and specialty chemicals. This has raised concerns among economists about supply chain disruptions and rising consumer prices.
According to CNBC, UBS Investment Bank raised its gold price forecast, predicting that gold will reach $3,700 by September 2026. UBS strategists believe that sub-trend economic growth, Fed easing policies, and a weaker U.S. dollar will drive gold prices higher. Meanwhile, the U.S. fiscal deficit and doubts about the Fed’s independence also support this outlook.
As concerns about a recession and risks related to Trump-linked companies grow, demand for downside protection in Bitcoin’s derivatives market has surged. Bitcoin’s options skew shifted bearish on Friday and continues to deteriorate, reflecting heightened investor caution.
The delta skew (put-call ratio) for Bitcoin’s 30-day options jumped to 12%, hitting a four-month high. Under neutral conditions, this metric typically fluctuates between -6% and +6%, reflecting a balance between call (buy) and put (sell) option pricing. A reading above 10% indicates extreme fear, but such levels are usually difficult to sustain for long.
On April 7, the metric had surged to 13% when Bitcoin fell below $74,500 for the first time in five months. Investors who took risks at that time were rewarded with a 40% return within a month, as Bitcoin rebounded to $104,150 on May 8.
There is currently no evidence that the Bitcoin bull market has ended. Traders’ panic often exceeds rational expectations. In fact, Bitcoin may even benefit from potential capital outflows from the stock market, suggesting that the current turbulence is not enough to negate the long-term bullish trend.
