- Bitcoin dropped to $112,174 on Sunday after a seven-year whale sold nearly $2 billion worth of Bitcoin for Ethereum.
- Concerns over Federal Reserve policy amplified the decline and reduced expectations for September rate cuts.
Bitcoin experienced a sharp decline, falling below $112,000 to trade at around $111,435.85 at the time of writing. The drop comes days after Bitcoin hit an all-time high of $124,457 earlier on Thursday. The decline coincided with notable developments in the crypto space, raising questions about whether the bull market is over as the macroeconomic environment grows more uncertain.
Whale Activity Drives Market Volatility
A seven-year Bitcoin whale executed a massive rotation strategy, converting nearly $2 billion worth of Bitcoin into Ethereum over the past week. This transaction triggered an immediate 2.2% price decline within a 10-minute window on Sunday, demonstrating the outsized impact that large holders continue to have on cryptocurrency markets.
Bitcoin enthusiasts like Willy Woo attribute the decline and slower price action to Bitcoin’s oldest whales cashing out after holding the asset for years.
“This differential in cost basis, the supply they hold, and their rate of selling has profound impacts on how much new capital needs to come in to lift price,”
the Bitcoiner said, noting it now takes over $110,000 of new capital to absorb every Bitcoin.
Why is BTC moving up so slowly this cycle?
BTC supply is concentrated around OG whales who peaked their holdings in 2011 (orange and dark orange).
They bought their BTC at $10 or lower. It takes $110k+ of new capital to absorb each BTC they sell. pic.twitter.com/7CbWXsvX2l
— Willy Woo (@woonomic) August 24, 2025
The recent whale activity represents part of a broader pattern emerging in cryptocurrency markets. Four days before Sunday’s major transaction, another crypto whale sold 670 Bitcoin valued at $76 million to establish a long position in Ethereum.
Federal Reserve Policy Expectations Shape Trading Sentiment
Multiple factors contributed to Bitcoin’s decline beyond whale selling activity. Federal Reserve Chairman Jerome Powell claims that the state of the economy, which includes a noticeable slowdown in employment growth, indicates that the Fed may need to lower its benchmark rate.
However, he refrained from committing to a rate cut at the Fed’s next meeting in September. The probability of a September interest rate cut fell dramatically from approximately 92% to 73%.
Powell noted that President Trump’s tariffs are causing some price hikes, but he added that it’s hard to know how big or long-lasting those increases will be.
Bitcoin’s latest trading pattern indicates a consolidation phase following rapid gains earlier in the year. After reaching an all-time high near $124,290, Bitcoin has stabilized in a range just below $116,000.
This video breaks down the key factors driving Bitcoin’s sharp price decline.
