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26 August 2025,07:56

Daily Market Analysis

Crypto Market Suffers Sharp Selloff as Risk Sentiment Sours

26 August 2025, 07:56

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Key Takeaways:

*BTC slid below $110,000, and ETH erased its Friday rally, marking August lows amid a broader risk-off mood.

*Fed independence concerns spiked after President Trump ousted Fed Governor Lisa Cook, weighing on markets.

*MicroStrategy bought $357M in BTC, signaling continued long-term confidence despite near-term volatility.

Market Summary:

Major digital assets sold off sharply to start the week, with Ethereum relinquishing all of its gains from Friday’s rally—which had briefly pushed the token to a new all-time high—and Bitcoin breaking below the key psychological support level of $110,000. The sell-off dragged Bitcoin to its lowest level this month, reflecting a broad-based flight from risk-sensitive assets.

The downturn in crypto markets echoed a wider pullback across global financial markets. On Wall Street, the Dow Jones Industrial Average fell more than 300 points as political uncertainty rattled investor confidence. The abrupt removal of Federal Reserve Governor Lisa Cook by former President Donald Trump, following allegations of mortgage fraud, sparked fresh concerns over central bank independence and added to market jitters ahead of the upcoming U.S. election.

Despite short-lived rallies, underlying momentum in cryptocurrency markets remains weak. Both Bitcoin and Ethereum exchange-traded funds (ETFs) continued to experience net outflows, underscoring a lack of sustained institutional participation. The Crypto Fear & Greed Index held in “Fear” territory, reflecting persistently cautious sentiment and a lack of retail buying interest.

In a contrasting signal, business intelligence firm MicroStrategy—known for its aggressive Bitcoin acquisition strategy—announced an additional purchase of $357 million worth of BTC, funded through the sale of common stock. The move signals continued corporate confidence in the long-term Bitcoin narrative, even as short-term volatility and macro headwinds weigh on prices.

Market attention now turns to upcoming U.S. macroeconomic data and Federal Reserve communications for clues on whether risk appetite can stabilize. Should political and policy uncertainty persist, cryptocurrencies may remain vulnerable to further deleveraging.

Technical Analysis

BTCUSD, H4: 

Bitcoin (BTC) extended its losses in the last session, breaking below the critical psychological $110,000 level, a move that signals a strong bearish shift after the breakdown of its previous bullish structure.

While the sharp prior rally raises the possibility of a false breakout, a sustained move back above $110,000 in the near term would be needed to confirm a bullish reversal. Failure to reclaim that level, however, would likely intensify downside pressure and expose BTC to deeper losses.

Momentum indicators reinforce the bearish outlook. The RSI is edging toward the oversold zone, while the MACD failed to break above the zero line and is now diverging lower, suggesting that bearish momentum is accelerating.

Resistance level: 116,240.00, 121,780.00

Support level: 106,700.00, 102,815.00

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