Bitcoin’s remarkable ascent to new heights came to an abrupt halt on Thursday, as traders were hit with a wave of selling triggered by fresh US inflation concerns. The world’s largest cryptocurrency had just shattered its previous record, surging past $124,000 for the first time, before swiftly reversing course.

At its peak earlier this week, Bitcoin was riding high alongside Ether, which touched $4,791.19, just shy of its 2021 all-time high. But optimism evaporated after unexpectedly strong wholesale inflation data from the United States rattled global markets, prompting a rapid sell-off across digital assets.

By Thursday afternoon, Bitcoin had fallen 1.72% to $118,243, with 24-hour trading volumes hitting an eye-watering $108.89 billion, according to CoinMarketCap. Ether also lost momentum, slipping 2% to $4,591.40.

From Inflation Hopes to Inflation Shock

The pullback marked a dramatic change in sentiment from earlier in the week. On Tuesday, a cooler-than-expected US consumer inflation report fuelled hopes the Federal Reserve could cut interest rates as early as September. That data sent Bitcoin, Ether, and equity markets surging, with both the S&P 500 and Nasdaq setting fresh records.

However, Thursday’s wholesale inflation figures painted a less reassuring picture. The higher-than-anticipated readings undermined rate-cut optimism, sparking fears of prolonged monetary tightening. This triggered broad profit-taking across crypto markets, ending Bitcoin’s record-breaking momentum almost as quickly as it began.

Technical Signals Show Short-Term Weakness

Market charts confirm the sudden shift in momentum. TradingView’s four-hour analysis showed Bitcoin’s strong upward trend persisting until 13 August, when it topped out near $121,000. From there, prices broke below a key upward trend line and slipped under the 50-period moving average, a sign of weakening short-term support.

Bitcoin 4hr chart, Source: TradingView

While the 50-day moving average remains above the 200-day moving average, suggesting underlying medium-term optimism, the growing gap between Bitcoin’s spot price and its 50-day average points to possible increased volatility ahead.

Liquidation data further highlights the scale of the downturn. Coinglass reported over $1 billion in positions wiped out within 24 hours, with long traders bearing the brunt of the damage. Some $782 million worth of bullish bets were erased, impacting more than 219,000 traders. The largest single liquidation, a $10 million hit occurred on Bybit’s BTCUSD contract.

Medium-Term Outlook Still Favourable

Despite Thursday’s jolt, analysts caution against overreacting. The medium-term trend remains intact, buoyed by rising institutional participation, expanding adoption, and the broader momentum in risk assets. Bitcoin’s pullback, they argue, is a reminder of the market’s inherent volatility rather than a fundamental reversal.

Still, traders are bracing for choppier sessions in the near term, with inflation uncertainty likely to keep markets on edge. The challenge now is whether Bitcoin can stabilise above the $115,000-$118,000 range and mount another run towards its record high or whether inflation-driven fears will continue to weigh on sentiment.

For now, the cryptocurrency market stands at a crossroads: institutional confidence and adoption trends point one way, while macroeconomic headwinds tug the other. As Thursday’s events proved, even in a bull market, Bitcoin’s path is rarely smooth.

As Bitcoin adoption surges among corporations, analysts are drawing historical parallels with gold’s path to nationalisation in 1971 raising concerns that governments could one day seize corporate-held crypto reserves.

Corporate Bitcoin Holdings Top $100 Billion

Corporate treasuries have now amassed more than $100 billion in digital assets, according to recent data. Bitcoin-focused treasury firms alone hold around 791,662 BTC, worth roughly $93 billion. This represents almost 4% of Bitcoin’s total circulating supply.

Source: Chris Kuiper

The surge in institutional holdings follows a trend of accelerating adoption. In the past two weeks, 35 publicly traded companies have each surpassed the milestone of holding more than 1,000 BTC on their balance sheets.

For Bitcoin advocates, these developments are a key step towards the cryptocurrency’s long-term vision of becoming a dominant global monetary standard. However, some analysts warn that growing centralised corporate ownership could also create a single point of vulnerability, making Bitcoin more susceptible to government intervention.

Parallels with the 1971 Gold Standard Collapse

Prominent crypto analyst Willy Woo has compared Bitcoin’s growing corporate concentration to the historical precedent of gold’s nationalisation path before 1971.

At the time, the US operated under the Bretton Woods system, which pegged the dollar to gold at $35 per ounce. As global pressures mounted, President Richard Nixon suspended dollar convertibility into gold, effectively ending the gold standard and seizing control of the nation’s gold reserves.

Pictured left to right: Willy Woo, Preston Pysh, Max Kei, speaking at ‘Bitcoin’s Institutional Phase: Trojan Horse or Tipping Point? panel at Batlic Honeybadger 2025. Source: Cointelegraph

Woo suggested that a similar playbook could unfold with Bitcoin:

“If the US dollar is structurally getting weak and China is coming in, it’s a fair point that the US might do an offer to all the treasury companies and centralise where it could be then put into a digital form… You could then rug it like happened in 1971. The whole history repeats again.”

In such a scenario, governments could compel corporate custodians to surrender their Bitcoin holdings, centralise them, and potentially reissue them in a controlled digital format.

Why Whales Could Be Targets Too

The risk isn’t limited to corporate treasuries. Preston Pysh, co-founder of the Investors Podcast Network and Bitcoin venture fund Ego Death Capital, believes Bitcoin whales, individuals or private entities with large BTC holdings could also be targeted.

Preston Pysh, co-founder of the Investors Podcast Network

“They’re going to take the Bitcoin because it’s going to have an institutional custodian that does not want to go to jail,” Pysh explained. He added that initial targets would likely be private entities with substantial Bitcoin reserves, especially if these holdings are stored with regulated custodians.

In essence, the very institutionalisation that could drive Bitcoin’s mainstream acceptance may also make it easier for governments to locate and seize large pools of coins.

Massive Upside Despite Risks

Despite these nationalisation concerns, analysts remain extremely bullish on Bitcoin’s long-term potential. Woo points out that Bitcoin has grown into a $2 trillion asset in just 16 years and could still expand 100 times over decades to come.

Adam Back, CEO of Blockstream

He estimates a $100 trillion market opportunity, echoing similar forecasts from Adam Back, CEO of Blockstream, who has called Bitcoin a potential $200 trillion global market in the long run.

Back described the scenario as:

“A sustainable and scalable $100-$200 trillion trade front-running hyperbitcoinisation, scalable enough for most big listed companies to move to BTC treasury.”

Hyperbitcoinisation refers to the hypothetical future where Bitcoin replaces fiat currency as the dominant medium of exchange and store of value, driven by its fixed supply and decentralised nature.

The Balancing Act Ahead

Institutional adoption remains a double-edged sword for Bitcoin. On one side, it is essential for the cryptocurrency to achieve the scale necessary to challenge the US dollar and surpass gold as a global monetary standard. On the other, it introduces centralised chokepoints, corporate custodians that could be leveraged by governments to exert control.

The history of gold’s nationalisation shows that state intervention in valuable assets is not unprecedented. While Bitcoin’s decentralised design offers some protection, the concentration of coins in regulated institutions could undermine that safeguard.

As Bitcoin’s corporate boom accelerates, the coming years may determine whether this wave of adoption cements its position as the backbone of a new financial era or sets the stage for a modern replay of 1971.

Bitcoin has come under renewed pressure in July, slipping back to the $115,000 range after peaking near recent highs. The drop comes amid a major sell-off linked to Galaxy Digital, as well as unusual activity from long-dormant Bitcoin wallets, some untouched for over a decade. While the fundamentals for Bitcoin remain strong, the sudden reactivation of old supply has shaken market confidence and introduced short-term uncertainty.

Galaxy Digital Sparks Market Jitters

One of the major triggers for Bitcoin’s recent slide is linked to Galaxy Digital, a crypto financial firm led by Mike Novogratz. Over a multi-day period, the company offloaded significant Bitcoin holdings, resulting in visible market impact.

Source: Lookonchain

According to blockchain analytics platform Lookonchain, Galaxy Digital deposited 2,850 BTC (worth around $330 million) to exchanges early on Friday alone. In total, more than 12,800 BTC (valued at $1.5 billion) was moved to exchanges within just 24 hours. This activity originated from a well-known Bitcoin whale address, which held 80,009 BTC, worth about $9.6 billion prior to the sell-off.

Source: Lookonchain

Transfers from this legendary wallet began on July 15 and were completed by July 18. On one of those days, more than 40,000 BTC was moved in a single transaction, shaking trader confidence and causing Bitcoin prices to dip further.

Although this heavy sell pressure initially caused sharp market reactions, some analysts believe the worst of the selling may now be over. Market watchers are now closely monitoring whether the market can stabilise or if more downside remains.

Dormant Bitcoin Wallets Wake After Years

In addition to Galaxy Digital’s moves, July has seen a wave of activity from Bitcoin wallets that have been inactive for year, even over a decade. This rare phenomenon has raised fears of further large sell-offs.

One standout case involves three wallets likely linked to the same owner, which moved a combined 10,606 BTC (worth around $1.26 billion). These wallets originally received their Bitcoin in December 2020, when BTC was priced at $18,803. At current prices, that’s a 6.3x gain, fuelling speculation that these holders may be preparing to take profits.

Source: Lookonchain

In another extraordinary case, a wallet that had been dormant for 14.5 years suddenly transferred 3,962 BTC (worth $468 million) this week. That wallet received its Bitcoin in January 2011, when the price was just $0.37 per coin making it one of the oldest reactivations ever recorded.

Source: Lookonchain

Earlier in July, yet another whale wallet moved 6,000 BTC ($649 million) after lying idle for six years. These moves suggest that long-term holders may be repositioning their assets, possibly anticipating further volatility or seeking to capitalise on high valuations.

Market Sentiment Turns Cautious

With Galaxy Digital’s offloading and dormant wallets stirring, trader sentiment has grown more cautious. Community discussions on X (formerly Twitter) are filled with speculation, particularly around the idea that Satoshi-era wallets (early Bitcoin adopters) may be preparing to sell during the next market rally.

Although the overall health of the Bitcoin network remains strong with mining activity, hash rate, and institutional interest all stable, the market appears to be entering a short-term phase of consolidation. Many traders are now focused on monitoring volatility, watching closely to determine whether selling pressure is finally easing.

Altcoin Season on the Horizon?

While Bitcoin struggles to regain momentum, altcoin traders are showing early signs of rotating capital into smaller cryptocurrencies. This shift is supported by a decline in Bitcoin’s dominance, which measures BTC’s share of the overall crypto market. The dominance metric fell from 64% to 60% between July 17 and July 21 before making a slight recovery to 61.55% by Friday.

Bitcoin Dominance. Source: TradingView

A declining dominance is one of the earliest indicators of an approaching altcoin season, where capital flows into altcoins, leading to faster gains in smaller assets. The Altcoin Season Index currently sits at 43, indicating that the crypto market is not yet in a full altseason. However, the rising trend suggests momentum may be building.

Altcoin Season Index. Source: Blockchain Center

Investors and analysts alike will be watching closely in the coming days to see if this trend continues. If Bitcoin stabilises and altcoins maintain their momentum, July’s volatility could mark the beginning of a broader shift in crypto market dynamics.