The price of Bitcoin fell more than 3% on Tuesday, falling back to the $112,000 level after briefly surpassing $116,000. This drop intrigued investors because it occurred during a period marked by positive geopolitical news and record gains in traditional markets.
According to data from CoinGecko, Bitcoin was trading near $115,500 as of 5:00 p.m. UTC on Tuesday, but plunged to $112,250 over the next three and a half hours. Ethereum (ETH) saw a steeper decline of around 4% during the same period.
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Crypto dissociates itself from the surge in stocks
The selloff was counterintuitive to market sentiment. At the time of the crypto plunge, the United States and China were finalizing preparations for their summit in Korea, with US President Donald Trump expressing hope for a “fantastic trade deal.” Media reports have even speculated that China could reduce fentanyl production in exchange for a potential 10 percentage point reduction in existing U.S. tariffs.
Supported by the improving business outlook, the Nasdaq 100 Index, which typically has a high correlation with Bitcoin, rose 0.6%. Likewise, the S&P 500 Index jumped 1.23% to hit an all-time high on Tuesday. Only Bitcoin and the broader cryptocurrency market saw weakness.
On-Chain Data Signals Low Buying Demand
The chain’s analysts point to continued weak buying sentiment as a likely cause of the unexpected decline. While US Spot Bitcoin ETFs – a key barometer of US spot market pressure – saw net inflows of around $200 million, this figure is considerably moderate compared to recent accumulation trends.
On-chain data platform Glassnode noted on X that Bitcoin’s recent price movement remains firmly tied to net inflows from US Spot ETFs. “The rebound from $107,000 coincided with US Spot ETF net flows turning positive,” the company said.
Inflows are lower than rally intensity
The main concern is the stagnation of these institutional capital flows. Glassnode stressed that current inflows “remain < 1 000 BTC/jour, nettement inférieurs aux > 2.5,000 BTC/day observed at the start of the main rallies of this cycle.”
Analysts concluded that “demand is recovering, but not with the intensity of recent rebounds.” This suggests that while there is underlying support, the required velocity of institutional capital needed to sustain a push past the $116,000 resistance level is currently lacking, leaving the market vulnerable to pullbacks.
