Bitcoin Hits $106,000 Before Tumbling Back

Bitcoin experienced a volatile start to the week, surging to $106,000 before slipping 3.8% to $102,450 within hours on Monday.

Bitcoin started the week on a turbulent note, surging to $106,000 before slipping 3.8% to $102,450 within hours on Monday.

This dramatic movement led to $178.46 million worth of crypto liquidations in the past 24 hours, with nearly equal amounts of long and short positions being liquidated, according to CoinGlass.

The turbulence comes amid broader economic concerns, including inflation warnings from the Federal Reserve and Walmart (NYSE:WMT) announcing price hikes due to ongoing trade tariffs. These factors have added pressure to the crypto market, which has seen significant fluctuations in recent days.

In a surprising turn of events, MicroStrategy (NASDAQ:MSTR), the company helmed by Bitcoin advocate Michael Saylor, is facing a class-action lawsuit for allegedly misleading investors. However, just hours later, MicroStrategy announced a staggering acquisition of $764.9 million worth of Bitcoin, showcasing its unwavering commitment to the cryptocurrency.

Ethereum experiences 4.3% slip amid liquidations

World no.2 crypto Ethereum saw a 4.3% decline from $2,500 to $2,400 on Monday. This slip triggered $264.4 million worth of ETH liquidations, with $205.28 million of these being long positions, as per CoinGlass.

The crypto is now trading at $2,412.96 and has seen a 0.66% decrease in the past hour, while remaining up by 1.41% over the last 24 hours.

The crypto is now down by 49.38% from its all-time high of $4,878 in November 2021, which it reached amid a broader wave of optimism in the crypto sector earlier this year.

But concerns over inflation and the Fed’s decision to keep its benchmark interest rate at 4.25% to 4.50% have stalled the market.

Why inflation and tariffs matter for crypto

The Federal Reserve issued warnings about the risks of rising inflation and unemployment, while Trump’s policies on tariffs have created uncertainty in global markets.

This was further highlighted by Walmart’s decision to increase prices due to the tariffs.

For cryptocurrencies like Bitcoin and Ethereum, these macroeconomic trends play a crucial role.

Inflation fears often drive investors toward risk-on assets, which could benefit crypto in the long run. But these macroeconomic concerns can also lead to heightened volatility, as seen in this week’s price swings.

Meme coins outperform amid risk-on appetite

While BTC and ETH encountered challenges, meme coins have emerged as unexpected winners.

Fueled by retail enthusiasm and social media virality, meme coins like SHIB, PEPE and WMEMA have outperformed major Layer-1 tokens, signaling a return of risk-on sentiment in the crypto sector.

Meme coins previously saw a steep correction following President Trump’s January inauguration, leading to significant liquidations among overleverage traders.

However, they have since rebounded, indicating a shift in market appetite toward speculative assets.

This trend underscores the short-term nature of the crypto market, which can quickly adjust to new stimuli.

Bitcoin’s global recognition gains traction

In a significant development, an Australian judge ruled that Bitcoin is a form of money, which could potentially exempt it from capital gains tax.

This decision is likely to facilitate broader adoption of BTC and pave the way for greater regulatory clarity in the rapidly evolving crypto landscape.

Meanwhile, El Salvador continues to reap benefits from its Bitcoin holdings, which recently surged in value to over $644 million following the purchase of 30 BTC last month.

President Nayib Bukele remains bullish on the cryptocurrency.