Bitcoin analysts are raising concerns about potential market manipulation as the cryptocurrency's price recently fell to a 17-day low. On Wednesday, Bitcoin's price dipped below $113,000, triggering discussions about the factors contributing to this downturn.

Price Performance and Market Sentiment

Bitcoin has experienced a notable downturn, retracing to as low as $112,600 on Tuesday. This marked a 17-day low and an 8.5% drop from its recent high of over $124,000 the previous week. The decline has fueled bearish sentiment among retail traders. According to blockchain analytics firm Santiment, retail traders have shifted from bullish to "ultra bearish," reflecting the most negative outlook on social media since late June. The Bitcoin Fear & Greed Index has also slipped into "Fear" territory, reaching its lowest level since late June, with a rating of 44 out of 100. The total cryptocurrency market capitalization has also decreased below $4 trillion, hitting a two-week low.

Potential Factors Behind the Price Drop

Several factors may be contributing to the recent price decline:

• Market Manipulation: Some analysts suggest that market manipulation could be a factor. Keith Alan, co-founder of Material Indicators, pointed to the appearance of bid liquidity lower down the order book, including "plunge protection" at $105,000, as a potential form of price manipulation. He referred to entities known as "Spoofy the Whale" and the "Notorious B.I.D.," which have been known to artificially influence price action.
• Liquidity Conditions: Data from CoinGlass indicates that bid liquidity was being taken on exchanges. Trader Daan Crypto Trades noted that Bitcoin had taken out liquidity on both sides over the past six weeks, as it ranged around the same price region.
• Technical Breakdown: Bitcoin has slipped below its 50-day Simple Moving Average at $115,870, which now acts as resistance. A head-and-shoulders pattern has formed with neckline support near $112,000. A break below that level could push BTC toward $108,000 or $105,150.
• Economic Factors: Concerns over the U.S. economy and stock markets, new U.S. import tariffs, and a drop in the Nasdaq 100 have also contributed to the decline. The imposition of 50% import tariffs on aluminum and steel products has raised concerns about supply chain disruptions and inflationary pressures.
• SEC Investigation: Reports that the U.S. Securities and Exchange Commission (SEC) is investigating potential fraud and stock manipulation at Alt5 Sigma, a company recently partnered with World Liberty Financial, have added to market uncertainty.
• Options Market Signals: Bitcoin's 30-day options delta skew (put-call) has surged to 12%, its highest level in over four months, signaling extreme fear.

Potential Rebound and Historical Context

Despite the recent downturn, some analysts suggest that this could be a healthy "bear trap" correction. Historical bull market cycles indicate that corrections are common and can provide buying opportunities. For example, in 2017, Bitcoin dropped 36% in September before rallying to fresh highs by December. A similar move occurred in 2021 when BTC corrected 23% and then powered to a record later that year. Santiment analysts emphasize that extreme bearish sentiment is often a contrarian indicator, with markets tending to move in the opposite direction of crowd expectations. Institutional players like Metaplanet and Strategy continue to accumulate during dips, suggesting that the current phase represents accumulation rather than capitulation.

Concluding Remarks

The recent drop in Bitcoin's price to a 17-day low has sparked concerns about potential market manipulation and broader economic factors. While retail sentiment has turned bearish, some analysts suggest that this could be a temporary correction within a larger bull market cycle. The situation remains fluid, and investors are closely monitoring market dynamics for signs of a potential rebound.