Bitcoin prices have fallen back in recent weeks, dropping to less than $108,000 on Friday, August 29 after reaching an all-time high above $124,000 earlier in the month. The world’s most valuable cryptocurrency by total market value declined to $107,500 around 5 p.m. EST, according to Coinbase data from TradingView. At this point, the digital currency was down more than 13% from the all-time high of nearly $124,400 it reached on August 13, additional Coinbase figures from TradingView reveal. When asked about this development, several analysts described the retreat from all-time highs as being a natural retracement. “After an extended rally to new all-time highs, some level of consolidation was inevitable,” Mike Cahill, CEO of Douro Labs, stated via email. “Markets don’t move in a straight line, and a 10–15% pullback in Bitcoin is well within the norm for an asset class that trades 24/7.” Doug Colkitt, a founding contributor at Fogo, also weighed in, stating that “Bitcoin doesn’t always move in straight lines. Most of the time, it stampedes.” “After ripping to $124K, you had a pile of leveraged longs chasing momentum. When funding costs get frothy, the market doesn’t need a reason to flush—it just needs gravity,” he stated through email, adding further context on the retracement. MORE FOR YOU “The decline we’re seeing right now isn’t some mystery macro event. It’s basic market mechanics: funds took profit, perps got crowded, and retail was late to the party.” Multiple Factors Fuel Decline Some analysts took a different approach when describing the pullback bitcoin has experienced in the last few weeks, highlighting a range of factors that drove price declines. “Several factors likely contributed to this decline, including profit-taking from funds that have been positioned long, elevated funding rates in derivatives markets, and thinner liquidity in August trading conditions,” said Cahill. “In combination, those dynamics can accelerate the process of driving a price down.” DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, also singled out multiple developments as driving prices lower. “Bitcoin’s pullback from record highs reflects a mix of profit-taking after the rapid run-up, lingering macro uncertainty, and shifting flows,” he said via email. “Traders locked in gains above $124K, while recent dollar strength and higher bond yields weighed on risk appetite.” “At the same time, ETF inflows cooled off after a fast pace in early August, removing a key near-term tailwind,” DiPasquale continued. “Together, those factors have pressured BTC back into consolidation mode.” Rotation Out Of Bitcoin Some market observers claimed that investors have been rotating out of bitcoin and into less prominent digital currencies. “After two years of underperformance in ETH vs BTC we’re seeing an active rebalancing of funds out of BTC into ETH,” Greg Magadini, director of derivatives for digital asset data provider Amberdata, stated via email. “ETH is the web3/tech play of the crypto space,” he stated. “With the enthusiasm for stablecoins, deregulations and DeFi the market is now finding itself underinvested in ETH. This is causing a relative rebound of ETH versus BTC.” “ETH is also a staking currency and major ETF issuers have filed to enable staking rewards for ETH holders,” Magadini added. “These application decisions could come as early as October, which would lead to more inflows into ETH ETFs.” “Lastly, corporate treasuries are now moving away from investing solely into BTC and incorporating ETH allocations as well,” he stated. “Altogether this leads to enthusiasm shifting away from BTC (at least for the time being).” Tom Bruni, editor-in-chief & VP of community at Stocktwits, also commented on investors moving money around. “The rotation from mega-cap winners to smaller-cap catch-up plays has been underway in equities and crypto for the last two months, causing Bitcoin’s dominance to fall from 66% to 57%,” he stated. “With that being said, Ethereum, Ripple, and several other altcoins have hit logical levels of resistance near their 2021 highs that the bulls have failed to break above.” “September is typically a weak month seasonally for risk assets in general, and without a clear catalyst for bulls, their recent momentum has stalled,” Bruni continued. “Bitcoin’s inability to maintain its new highs above $120,000 following a slew of good news in August is telling. Given that support near $110,000 has been lost, the next level that the Stocktwits community is watching is $100,000, where the 200-day moving average and a prior breakout level sit,” he stated, offering some technical analysis. “As for Ethereum, $3,900 is the level bulls are watching on the downside. Should those levels break, that would indicate a deeper correction in crypto may be ahead,” Bruni added. “However, for now, bulls are staying cautiously optimistic and looking for prices to set up for their next leg higher by trading in a sideways range,” he stated, offering a forward outlook. “As for the next potential catalysts, all eyes are on the inflation and employment data, as the market bets on a September rate cut from the Fed. Should we get a rate cut, retail is betting on a big breakout from altcoins and is investing in Ethereum and Ripple, both of which trend regularly on the platform.”