5 Reasons Why Bitcoin Price, Ethereum, XRP, Solana May Crash More

Key Insights:

• Fears related to Bitcoin price peak in September and mid-October are causing massive liquidations in the crypto market.
• Upcoming crypto options expiry and PCE inflation data weighed on Bitcoin and altcoins performance.
• Further market-wide profit booking for a deeper correction is expected amid seasonality and on-chain sell signals.

The crypto market cap slumped from $4.2 trillion to $3.76 trillion in August, resulting in the crypto industry losing more than $400 billion in just a few weeks.

Various headwinds such as macroeconomic impacts, Bitcoin’s historical peak and crypto seasonality jitters, as well as sell signals by on-chain metrics, erased bullish sentiments.

In particular, the Crypto Fear & Greed Index has dropped from 78 (greed) to 46 (neutral) in a month. This signals a rising negative sentiment in the broader crypto market, turning traders cautious.

5 Crypto Market Crash Triggers

The Coin Republic continuously warned the crypto industry about an upcoming crash, while experts gave higher targets for Bitcoin and Ethereum prices.

The latest alert on Friday warned crypto market crash due to cautious market trends, including upcoming monthly crypto options expiry and the PCE inflation data release on August 29. As predicted, positive sentiment from Fed Chair Jerome Powell’s dovish comments faded.

Here are the key 5 reasons behind the ongoing crash in Bitcoin (BTC) price, Ethereum (ETH), XRP, Solana (SOL), Dogecoin (DOGE), Cardano (ADA), Chainlink (LINK), and other altcoins.

Bitcoin Bull Market Peak Expected in September or October

Bitcoin price could peak in September and mid-October as Bitcoin cycle has historically peaked 12-18 months after the halving. While retail investors never returned after the crash earlier this year, long-term holders and whales started exiting months ago.

On August 18, The Coin Republic reported a major Bitcoin price crash ahead, similar to a 29% price discovery correction in 2017 and a 25% drop in 2021. Moreover, reversal patterns such as the swing failure pattern (SFP) and double-top emerged.

This week, a dormant whale woke up after 5 years and sold 24K BTC worth $2.7 billion. The single move crashed Bitcoin to $111K and erased more than $50 billion in market value.

The most notable market exit by a Satoshi-era BTC whale was the largest-ever, valued at $9 billion. Also, Bitcoin OG Willy Woo liquidated all his Bitcoin holdings in July.

Monthly and Quarterly Bitcoin and Ethereum Options Expiry

BTC options worth $11.8 billion are set to expire on the largest derivatives crypto exchange Deribit on Friday. The put-call ratio of 0.88 and the maximum pain point at $116,000 indicate huge bearish sentiment among traders.

Moreover, the quarterly BTC options expiry will witness $13 billion worth of bets expire in September. At the time of writing, the put-call ratio was 0.58 and the maximum pain price was $110,000, significantly lower than August’s max pain price.

In contrast, $3.1 billion in ETH options are to expire this month, with a put-call ratio of 0.72. At the time of writing, the max pain point was $3,800.

The September quarterly ETH options expiry data showed $4.8 billion worth of bets to expire. The put-call ratio is 0.46 and the max pain price at $3,000.

The sentiment towards monthly options expiry and quarterly expiry is to bring further correction in Bitcoin and Ethereum. As a result, altcoins including XRP, SOL, DOGE, ADA, and others could also tumble.

US PCE Inflation Data Release and Fed Concerns

Global markets eye the U.S. Federal Reserve’s preferred inflation gauge US PCE data release this Friday. A higher-than-expected PCE reading will cause the Fed to keep interest rates unchanged.

Traders turned cautious after the US PPI inflation jumped 0.9% in July, raising core PPI inflation to 3.7%. Hopes of a Bitcoin price rally to at least $135K and an upcoming altcoin season faded.

Economists expected Core PCE inflation month-over-month (MoM) to come at 0.3%, raising the year-over-year (YoY) Core PCE Index to 2.9%, higher than the 2.8% last month.

Meanwhile, PCE inflation MoM is forecasted at 0.2%, keeping the headline PCE inflation unchanged at 2.6%.

Global markets fell as US President Donald Trump fired Federal Reserve Governor Lisa Cook, raising concerns about the Fed’s independence. Cook claimed it was an illegal move and said to continue her duties towards the U.S. economy.

Crypto Market Seasonality

Seasonality has also impacted Bitcoin and crypto assets’ upside momentum. August and September have historically been the worst months for the crypto market.

According to Bitwise Asset Management, Bitcoin price performance since 2020 averaged 0.23% in August and -4.68% in September.

The concerns surrounding seasonality have triggered outflow from spot Bitcoin and Ethereum ETFs, reported crypto research firm Matrixport. While Ethereum ETFs recorded some capital rotation from Bitcoin ETFs, the firm warned about seasonal headwinds.

Moreover, the recent crypto market selloffs triggered market-wide profit booking. Altcoins such as Fartcoin, Bonk, Sky, dogwifhat, Pudgy Penguins, FLOKI, and Worldcoin have tumbled 30-48% in a month.

Sell Signals by Bitcoin On-Chain Data

Whale and institutions continue to offload holdings amid sell signals by on-chain metrics, including MVRV Ratio. Bitcoin Coinbase Premium Gap turned negative again, indicating weakening demand in the US market.

Bitcoin short-term holders (STH) also started selling their holdings. The next strong support zone is $100K-$107K range. According to CryptoQuant analyst, the STH Realized Price and SMA 200D intersect at this range.

If Bitcoin breaks deeper, the next support is around $92-$93K. This marks the cost basis level of short-term investors who held coins for 3 to 6 months.